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Author: 


Insurance  Company  of 
North  America 

Title: 

Episodes  of  history  in  the 
stories  of  the... 

Place: 

[Chicago] 

Date: 

1916 


MASTER  NEGATIVE  « 


COLUMBIA  UNIVERSITY  LIBRARIES 
PRESERVATION  DIVISION 

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ORIGINAL  MATERIAL  AS  FILMED  -    EXISTING  BIBLIOGRAPHIC  RECORD 


Insurance  company  of  Nortii  America. 

Episodes  of  history  in  the  stories  of  the  United  States 
and  the  Insurance  company  of  North  America  as  bound 
up  together  in  national  achievement,  1792-1917,  commem- 
orating the  one  hundred  and  twenty-fifth  anniversary  of 
the  formation  of  **the  president  and  directors  of  the  In- 
surance company  of  North  America,"  December  10, 1792. 
[Chicago]  Priv.  print.  [R.  R.  Donnelley  &  sons  company] 
1916. 


96  p.    20J-. 


(Continued  on  next  card) 


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Episodes  of 


Insurance  company  of  North  America. 

history  ...    1916.    (Card  2) 

Contents.  —  The  organization,  1792-1793.  — Early  developments,  1794- 
1799. — Expansion  and  permanence,  1800-1816. — Era  of  nation  building, 
1817-1841.— The  era  of  gold  and  wars,  1842-1866.— Recuperation  and  prog- 
ress, 1867-1891.— Into  the  twentieth  century,  1892-1916.— Personality  in 
achievement. — Stabilizer  of  nations:  in.*iurance. 


l.Jhisurance  company  of  North  America.       i^itle. 

Library  of  Congress  HG9780.1 5A5 

Copy  2. 

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EPISODES      OF 
HISTORY 


In  the  Stories 

of  the  United  States 

and  the   Insurance   Company 

of  North    America 

as  Bound  up  Together 

in  National 

Achieve??ient 


1792-1917 


SCHOOL  0? 

BUSINESS 


Commemorating  the 

One  Hundred  and  Twenty-fifth 

Anniversary    of    the   formation    of 

*'The  President  and  Directors  of 

The  Insurance  Company 

OF  North  America" 

December  10, 1792 


THE  FOREIGN  TRADE  CLUB 


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COPYRIOHT,   1916    BY 

INSURANCE  COMPANY  OF  NORTH  AMERICA 
Philadelphia,  Pa. 


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R.  R.  DONNEIXEY  &  SONS  COMPANY 
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FOREWORD 
The  Insurance  Company  of  North 

America  is  more  than  the  oldest  American  joint  stock 
insurance  corporation.  Its  early  history  is  closely  inter- 
woven with  the  history  of  the  government  itself  and 
reflects  at  every  step  the  early  struggles  of  the  fathers  of 
the  Nation  to  make  the  great  Republic  we  have  to-day. 

The  North  America  has  therefore  veritably 
grown  up  out  of  and  with  the  country  itself;  its  archives 
teem  with  entries  and  records  concerning  great  historical 
names  and  transactions  connected  with  places,  property 
and  events  that  occupied  the  thoughts  and  inspired  the 
hopes  of  the  makers  of  liberty  and  their  successors,  the 
makers  of  the  country. 

It  has  been  thought  appropriate  to  record  in 
episodes,  swiftly  told,  the  origin  and  development  of  both 
the  Country  and  the  Company,  for  the  interest  it  might 
have  to  the  army  of  loyal  agents  that  represent  The" 
North  America  everywhere,  who  may  care  to  know  its 
biography. 


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TABLE  OF  CONTENTS 

Page 

The  Organization,  i  792-1 793 7 

Early  Developments,  i  794-1 799 13 

Expansion  and  Permanence,  1800-1816     ...  19 

Era  of  Nation  Building,  1817-1841      ....  31 

The  Era  of  Gold  and  Wars,  i  842-1 866    ...  43 

Recuperation  and  Progress,  i 867-1 891     ...  59 

Into  the  Twentieth  Century,  1892-1916  .     .     .  71 

Personality  in  Achievement 79 

Stabilizer  of  Nations:    Insurance      ....  89 


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EPISODES  OF  HISTORY 

THE  ORGANIZATION 

1792-1793 

The  very  first  joint-stock  fire  insurance  company  of  the 
United  States  was,  as  it  is  yet,  the  Insurance  Company  of 
North  America.  Its  history  began  with  the  history  of 
the  American  Government  itself.  Its  birth  is  one  among 
that  small  group  of  great  events  in  the  last  decade  of  the 
Eighteenth  Century  that  served  to  change  the  map  of  the 
world  geographically,  politically,  socially,  and  in  methods 
of  organized  efficiency.  The  new  republic  was  to  create 
the  model  of  political  freedom  and  this  in  turn  was  to 
create  individual  liberty.  So  the  Insurance  Company  of 
North  America  was  to  be  the  model  of  that  new  form  of 
protection  against  fire  and  marine  hazards  which  was  to 
revolutionize  crude  underwriting  and  provide  the  very 
cornerstone  of  modern  commercial  progress  as  the  basis 
of  business  credit. 

The  Insurance  Company  of  North  America  had  its 
birth  in  the  very  same  room  in  Independence  Hall,  Phila- 
delphia, where  the  immortal  Declaration  of  Independence 
had  been  signed  for  the  struggling  Colonies  sixteen  years 
before  —  1776.  It  was  in  the  year  1792,  the  same  year 
that  General  George  Washington,  after  having  been  a  sort 
of  military  rebel  president,  was  re-elected  President  of  the 
free  and  triumphant  states. 

Those  indeed  were  stirring  times.  Washington  had 
been  first  installed  as  President  in  1789  and  had  gone 
through  Philadelphia  from  Mount  Vernon  for  the  inau- 
guration in  New  York.  On  this  trip  (it  then  took  two 
days  to  make  the  journey  from  Philadelphia  to  New  York 
in  the  speediest  coaches)  he  stopped  at  Trenton  and  there 
heard  "The  President's  March,"  which  was  played  for 

I7] 


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EPISODES        OF        HI   STORY 

the  first  time  in  public  and  is  now  so  familiarly  known  as 
"Hail,  Columbia!" 

When  "the  President  and  Directors  of  the  Insurance 
Company  of  North  America"  was  projected,  it  was  doubt- 
less named  so  peculiarly  by  its  first  president,  John  Max- 
well Nesbitt,  who  had  served  on  the  organization  com- 
mittee, as  ten  years  previously  he  had  assisted  in  the  for- 
mation of  "The  President,  Directors  and  Company  of  the 
Bank  of  North  America."  Because  there  is  no  other  in- 
surance company  of  a  similar  name,  those  in  the  pro- 
fession speak  of  the  Insurance  Company  of  North  America 
as  "The"  North  America. 

Our  forefathers  were  unusually  far-sighted,  but  even 
in  the  later  Colonial  days  did  not  seem  to  foresee  the  great 
security  of  incorporated  indemnity  with  its  ample  capital, 
though  the  plan  was  popular  in  England  at  the  time. 
Hence,  when  merchants  sent  a  ship  to  sea  laden  with  a 
valuable  cargo,  they  sought  private  underwriters  for  their 
protection.  That  is,  they  went  to  individuals  who  might 
risk  as  much  as  £200  each  on  a  "bottom,"  and,  as  there 
were  probably  fifty  private  underwriters  in  Philadelphia, 
the  total  indemnity  —  however  valuable  the  cargo  —  only 
approximated  $50,000. 

The  canny  William  Penn  early  saw  the  weaknesses  in 
private  underwriting  and  when  his  friend,  James  Logan, 
urged  upon  him  a  cover  "notwithstanding  thy  tender- 
ness about  insurance,"  took  his  advice  (1705)  but  later 
(at  that  time  there  were  no  stock  companies)  wrote: 
"J.  Askew  ensured  £100  upon  thy  letter  but  the  ensurer 
broke,  and  the  twenty  guineas  lost.     Ensurers  fail  much." 

In  the  good  old  Colonial  days  almost  anyone  could  set 
himself  up  as  a  private  underwriter,  and,  if  lucky,  he  might 
make  a  success.  There  is  an  old  but  entirely  human  piece 
of  folk-lore  that  went  the  rounds  years  ago  about  one  of 
these  underwriters  who  rather  late  in  the  "game"  at- 
tempted to  build  his  business  by  cutting  rates  —  a  practice 

18] 


"THE"        NORTH        AMERICA 


some  modern  underwriters  have  not  failed  to  follow,  and 
even,  it  might  be  said,  have  followed  to  fail.  But  this 
particular  underwriter  prospered,  and  as  he  waxed  fatter 
his  charges  increased,  until  a  customer  remonstrated,  re- 
minding him  that  when  he  first  began  taking  his  "risque" 
—  risk  was  spelled  in  the  French  way  then  —  his  rates 
were  only  half  or  even  less  than  his  competitors.  What- 
ever the  exact  text  of  the  reply,  no  one  will  fail  to  grasp 
his  meaning  when  he  said,  "Well,  I've  got  something  to  lose 

now!" 

Even  with  such  obvious  advantages  as  accrued  from 
$600,000  in  capital  guaranteeing  the  payment  of  losses,  the 
"subscribers  to  the  Insurance  Company  of  North  America" 
had  a  difficult  time  getting  their  charter  through  the 
Pennsylvania  legislature,  so  persistent  and  potent  was 
the  opposition  of  the  clique  of  private  underwriters  and 
their  friends.  After  laboring  for  a  year  or  so,  how- 
ever, their  petitions  and  special  missions  did  prevail,  but 
not  until  there  had  been  some  talk  of  removing  the  in- 
stitution to  Delaware. 

The  North  America  completed  its  organization  De- 
cember 10,  1792,  just  after  General  George  Washington 
had  been  re-elected  President  for  a  second  term  and  while 
the  capital  of  the  nation  was  located  at  Philadelphia,  by 
congressional  agreement,  for  a  term  of  ten  years,  to  end  in 
1800,  when  the  City  of  Washington  on  the  Potomac  would 
be  ready  for  its  reception. 

It  was  at  this  time  that  the  first  census  under  the 
new  constitution  had  just  been  taken  to  determine  con- 
gressional representation  and  showed  that  there  were  only 
3,380,000  people,  Indians  excepted,  living  in  the  eleven 
states,  Virginia  having  one  fifth  of  the  whole  number  and 
Pennsylvania  about  one  ninth.  The  six  largest  cities  of 
that  day  (Boston,  New  York,  Philadelphia,  Baltimore, 
Charleston  and  Salem),  taken  together,  had  but  131,000 
people  —  the  largest  less  than  50,000. 

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EPISODES        OF       HISTORY 

The  formation  of  the  North  America  grew  out  of  a 
.    proposition   to   organize   ''The   Universal   Tontine"   in 
Philadelphia,  after  similar  trials  had  met  failure  in  Boston 
and  New  York  the  previous  year  (1791),  and  when  the 
final  gathering  in  Philadelphia  (November  3,  1792)  showed 
that  it,  too,  would  collapse,  a  committee  was  selected  to 
devise  and  report   means  to   "utilize  the  fund   [about 
$84,000]  already  subscribed."     Nine  days  later  the  com- 
mittee reported  that  the  plan  for  a  tontine,  based  on  lon- 
gevity and  very  popular  in  France,  be  changed  to  a  society 
to  be  called  the  ''Insurance  Company  of  North  America." 
Apparently  they  worked  rapidly  in  those  days  for  the  plan 
was  approved  November  19,  about  40,000  of  the  60,000 
shares  were  reported  subscribed  by  December  i  and  the 
secretary,  Ebenezer  Hazard,  a  former  postmaster-general 
under  the  Confederation  of  States,  called  a  meeting  of 
subscribers  at  the  State  House  (Independence  Hall),  on 
December  10,  to  elect  directors  and  complete  the  orgariza- 
tion.     The  new  board  convened  the  following  day  at  the 
City  Tavern  —  the  popular  assembly  place  of  business 
men  —  and  selected  officers,  also  appointing  committees 
to  petition  the  legislature  for  a  charter,  to  prepare  a  table 
of'lowest  premium  rates"  as  a  guide  to  the  "sitting  com- 
mittee," and  to  provide  a  headquarters,  while  the  secretary 
was  instructed  to  prepare  a  marine  policy  form. 

Three  days  later  (December  14)  the  board  met  in  its 
own  office  at  what  was  then  119  South  Front  Street  and 
is  now  No.  213,  and  on  the  following  day  the  first  policies 
were  issued. 

In  1789,  as  soon  as  General  Washington  was  inaugu- 
rated. Congress  proceeded  to  organize  the  new  govern- 
ment and  such  was  the  difficult  financial  situation  of  the 
country  that  it  called  upon  the  brilliant  financier,  Alex- 
ander Hamilton,  Secretary  of  the  Treasury,  to  suggest 
plans  in  further  support  of  the  public  treasury.  Hamilton 
strongly  urged  the  "Bank  of  the  United  States"  as  a 

[10] 


"THE"       NORTH       AMERICA 


remedy  and  in  the  face  of  great  opposition  this  was  ap- 
proved and  established  in  1791.  Policy  No.  10,  issued  by 
"The  President  and  Directors  of  the  Insurance  Company 
of  North  America,"  was  in  favor  of  this  "Bank  of  the 
United  States"  and  covered  $20,000  on  money  in  any 
"bottom"  from  Charleston,  S.  C,  to  Philadelphia  (the 
bank's  headquarters)  or  New  York,  at  one  per  cent 
premium,  the  name  of  the  company  being  written  in  pains- 
takingly by  the  secretary,  who  signed  himself  "Eben" 
Hazard,  on  a  printed  form  then  in  common  use  by  private 
underwriters. 

In  1792  the  French  Republic  was  established  and  this  led 
to  war  between  France  and  England  the  following  year, 
so  widely  felt  in  the  United  States.  We  then  had  only  a 
treaty  of  peace  with  Great  Britain,  but  with  France  two 
treaties  —  one  of  alliance  and  one  of  amity  and  com- 
merce. By  the  terms  of  the  treaty  of  alliance,  the  United 
States  was  obligated  to  guarantee  to  France  her  possessions 
in  America,  namely,  the  French  West  Indies.  When 
President  Washington  heard  that  war  had  been  declared 
between  France  and  England,  and  fearing  the  United 
States  would  be  called  upon  to  send  its  fleet  to  protect  the 
possessions  of  France,  he  issued  a  proclamation  of  neu- 
trality (1793).  This  proclamation  incited  the  French  to 
claim  a  violation  of  the  commercial  treaty  and  to  commit 
depredations  on  American  commerce,  causing  great  losses 
to  shipping  and  so  also  to  the  Insurance  Company  of 
North  America.  These  losses  soon  ran  into  large  sums  of 
money  and  on  August  27,  1793,  upon  the  advice  of  Sec- 
retary of  State  Thomas  Jefferson,  the  claims  were  thrown 
into  the  hands  of  the  government  for  adjustment.  In  the 
settlement  with  France,  however,  the  treaty  provided 
that  the  United  States  should  satisfy  all  these  so-called 
"  French  Spoliation"  claims  with  its  own  citizens. 

These,  in  brief,  were  the  early  beginnings  of  the  In- 
surance Company  of  North  America,  the  history  of  which 

[III 


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EPISODES 


OF       HISTORY 


1 


is  so  indelibly  interwoven  with  the  commercial  develop- 
ment of  the  United  States  and  which  is  now  (December 
lo,  1916)  entering  upon  the  125th  year  of  its  honorable 
career  as  the  first  joint-stock  insurance  company  of  the 
United  States. 

HISTORICAL  MEMORANDA,  1792-1793 

Governmental.—  National  capital  located  in  Philadelphia  —  George  Wash- 
ington re-elected  President  for  second  term  -  Called  Secretaries  of  Treasury 
State  and  War.  Chief  JusUce.  Attorney-General  and  Vice-President  into  con' 
sultation  resulting  in  present  "  Cabinet "- Total  national  debt  about  $75  000  - 
000 -Kentucky  admitted  as  fourteenth  state  in  1792 -Ten  amendments  io 
Constitution  made  effective  by  states. 

Economic—  Postal  System  now  being  extended  from  75  offices  existing  in 
I790.  postage  being  prepaid  by  cash  deposits  and  no  books,  papers  or  mer- 
chandise accepted  as  mailable  matter -The  Bank  of  the  United  States  at 
Philadelphia,  capital  $10,000,000.  gave  hearty  tone  to  business,  restoring  con- 
fidence and  credit-  Canal,  manufacturing  and  insurance  companies  projected - 
Steamboat  invented  by  John  Fitch  advertised  to  ply  on  Delaware  River  but  not 
well  patromzed  and  was  withdrawn  -  Cotton  exported  to  Europe,  about 
200,000  pounds  —  Slaves  in  United  States  numbered  700,000. 

War  —  Establishment  of  French  Republic  brought  on  war  with  England  and 
involved  the  United  States,  which  had  declared  neutrality  -  American  shipping 
seized  by  both  France  and  England,  causing  heavy  losses. 

r«rntor,-fl/.- Area  of  United  States  entirely  east  of  Mississippi  River,  com- 
prising fourteen  states  -  Boston  ship  captain  named  Gray  discovered  Columbia 
River  m  Oregon  and  named  it  in  honor  of  his  ship  -  Population,  excluding 
Indians,  about  3,500.000  —  Three  fourths  of  country  uninhabited. 

Political.—  Opposition  to  policy  of  Federalists  in  power  caused  antis  to  or- 
ganize Republican  Party  in  1792.  forerunner  of  present  Democracy. 

/«j«ra«c«.— Insurance  Company  of  North  America  formed  in  1792  with 
»6oo,ooo  capital,  first  in  United  States  -John  M.  Nesbitt.  first  president,  Eben- 
ezer  Hazard,  first  secretary  -  Heavy  marine  losses  sustained  as  a  result  of 
French  seizures  cause  still  unsettled  French  Spoliation  claims. 


[12] 


EARLY  DEVELOPMENTS 
1794-1799 

The  six  years  following  the  period  in  which  the  In- 
surance Company  of  North  America  was  organized  and 
began  business  —  the  years  that  closed  the  Eighteenth 
Century  and  concluded  practically  the  first  decade  in  the 
history  of  the  United  States  —  were  full  of  trials  and  trib- 
ulations, and  the  wonder  is  that  the  country  was  able  to 
maintain  itself  with  the  divisions  within  and  the  complica- 
tions without.  Equally  is  it  a  wonder  that  the  North 
America  survived,  so  interwoven  were  its  fortunes  with 
those  of  the  government. 

President  Washington's  proclamation  of  neutrality 
in  the  war  between  France  and  England  was  resented  by 
members  of  the  newly  organized  Republican  Party, 
who  became  the  violent  partisans  of  France.  Everywhere 
the  French  tri-color  emblem  with  the  liberty  cap  (which 
latter,  by  the  way,  was  designed  by  Lafayette,  who  fought 
in  the  Revolutionary  War  with  the  Patriots) ,  was  hung  up 
in  the  coflfee  houses  which  were  the  clubs  of  the  day. 
"Republicans"  greeted  each  other  in  the  prevailing  French 
style  as  "Citizen"  So-and-so.  The  Federalists  were  not 
necessarily  English  sympathizers  but  they  supported  the 
government.  Under  England's  "Rule  of  1756,"  which 
provided  that  no  neutral  in  time  of  war  should  have  a 
trade  she  did  not  possess  in  time  of  peace,  that  nation  be- 
gan to  seize  American  ships,  and  a  statement  made  in  the 
House  of  Lords  at  the  time  showed  that  in  the  short  space 
of  five  months,  ending  March  28,  1794,  over  600  American 
ships  were  captured  or  detained. 

While  the  Republican  Party  demanded  war  on  Eng- 
land, President  Washington  was  bent  on  peace  and  sent 

[13] 


1 


I 


i 

a 


■Hi 


EPISODES 


OF       HISTORY 


John  Jay  to  London  to  conclude  our  first  commercial 
treaty  with  England.  This  so  offended  the  French  Direc- 
tory that  they  sent  our  minister  out  of  France  and  them- 
selves again  began  depredations  on  American  commerce. 
Some  of  these  contentions  have  arisen  anew  during  the 
European  War  of  1914  and  are  the  cause  of  continued 
friction. 

AU  these  events  very  naturaUy  had  their  direct  effect 
on  the  marine  losses  of  the  North  America.  Although 
its  original  articles  contemplated  doing  a  fire  as  well  as 
marine  business,  it  was  not  until  after  its  charter  had  been 
formally  granted  April  14,  1794,  that  consideration  of 
fire  insurance  was  taken  up  seriously  and  even  then  it  was 
postponed  until  fall  because  of  the  ravages  of  yellow  fever 
in  Philadelphia,  necessitating  several  removals  of  the  home 
office  to  Germantown,  a  suburb. 

Fire  insurance  was  then  very  little  known  and  was  con- 
sidered beneath  the  notice  of  private  underwriters;  but 
two  co-operatives  or  mutuals  had  come  into  being  —  the 
second  being  organized  because  the  first  would  not  insure 
houses  surrounded  by  shade  trees,  which  it  was  claimed 
hindered  fire  extinguishment. 

In  October,  1794,  the  directors  of  the  North  Amer- 
ica prepared  "  Proposals  for  Insurance,"  embracing  what 
are  now  termed  poHcy  conditions,  previously  agreeing  to 
insure  "full  values"  of  "goods  in  store,"  as  against  a 
proposition  to  limit  acceptance  to  two-thirds  value.  On 
December  10  its  first  two  fire  policies  were  issued,  the 
first  being  $8,000  on  dry  goods  for  three  years  at  30  cents 
per  $100  per  annum,  the  total  premium  $64,  which 
made  a  term  rate  of  two-and-two-thirds  annuals. 

Despite  the  security  offered  by  $600,000  of  capital, 
the  demand  for  fire  insurance  was  not  very  brisk,  for  policy 
No.  7  was  not  issued  until  December  31,  and  in  fact  during 
the  first  fiscal  year  only  seventy-three  policies  were  issued, 
despite  the  fact  that  in  January,  1795,  the  directors  de- 

[14] 


**T  H  E 


» 


NORTH       AMERICA 


cided  on  a  big  stroke  of  advertising  and  had  5,000  pro- 
posals printed  and  "distributed  to  the  houses  of  the  in- 
habitants of  Philadelphia."  In  March  the  directors  ex- 
tended operations  by  voting  to  insure  brick  or  stone  houses 
within  ten  miles  of  the  city,  if  located  in  Pennsylvania. 

About  this  time,  too,  the  United  States  was  getting  a 
little  hard  money  of  its  own,  copper  pieces  making  their 
appearance  from  the  Philadelphia  mint  in  1793,  silver  in 
1 794  and  gold  in  1 795.  In  those  days  you  could  take  your 
trinkets  or  bullion  to  the  mint  and  have  them  turned  into 

coins. 

During  his  second  and  last  term.  General  Washington 
had  not  only  foreign  complications  to  contend  with,  but 
had  to  call  out  the  militia  to  put  down  the  "Whiskey 
Rebellion"  at  Pittsburgh,  which  with  a  population  of  about 
2,000  was  the  largest  city  west  of  the  AUeghanies.     There 
was  no  method  of  transportation  over  the  mountains  then 
except  by  wagon  —  even  the  gravity  cars  on  tracks  that 
long  preceded  the  railways  were  to  come  many  years  later 
—  and  the  only  way  the  growers  could  get  their  corn  to 
market  was  by  way  of  the  Ohio  and  Mississippi  rivers. 
The  Spaniards  in  1794  had  the  Mississippi  closed  and  so 
the  growers  turned  their  corn  into  whiskey,  easily  trans- 
ported, and  refused  to  pay  the  government  tax,  which 
President  Washington  finally  collected  at  the  point  of 
muskets.     A  year  later  our  first  treaty  with  Spain  opened 
the  Mississippi. 

Much  to  the  regret  of  the  people  at  large,  General 
Washington  in  his  celebrated  Farewell  Address  declined 
to  accept  the  nomination  for  a  third  term  and  John  Adams 
was  chosen  President  in  1796,  receiving  71  votes  in  the 
electoral  college  against  68  for  Thomas  Jefferson,  who, 
under  the  law,  became  Vice-President.  It  was  in  this  year 
that  the  North  America  determined  "to  afford  the 
public  an  opportunity  to  make  insurances  on  buildings 
anywhere  in  the  United  States,"  if  the  premiums  offered 

[iSl 


i  i 


:    |i 


INFORMATION    OBSCURED 


;n 


fc 


i 


EPISODES 

"'^""'"'"rad  riit  L t  boot  In  western  Pennsylvania. 
N^ ;:Ly  Nt  vTrU  Massachusetts,  Delaware.  Mary- 
Si  vVnia  and  North  a^-J  S-th  ^^^^^^^^  ^^^^^  ^_ 

1797,  and  within  three  days  n  ^  j^^^^  driven 

he  learned  that  Minister  C.C  Pinckney  j^^^^ 

out  of  France  because  the  five  "^^^^^j'  ^^^  ^    i,„d. 
of  the  Republic  objected  to  the  Jay  Treaty  Ji  S 

The  President  ^^^^y^::'^^^''::!:^^,  message, 
session  to  resent  '^"^  action  and  del  ^^^^^^^^  , 

but  later  was  Prevailed  upon  to  t^  P  ^  ^^^ 

commission  composed  of  JoJ"  Mar^       -     ^^  ^^^.^  ^j^^ 
and  Minister  Pinckney.     They  were 
t  ,1oX^  "hTrfilrFreLh  directors  and 

3  r  ?hXted  Stages  .y^«^^^^  ^^  ,  ,. 

This  demand  for  "'^ut*  ™         o^ition  in  Con- 
...nationallover^theUnt^^^- 

?rs:::t;:s:r^a7d  wai  the  ^^^[^^^^'^^ 

ington  was  again  made  Commander.n  Ch^  ^^^ 

rank  of  Lieutenant-General     A   our  ^^  ^^,_ 

been  practically  aWj^f  "J^^^  ^^.u,  .pi^t.   built 
the  people  iiow   «an.fe^t^d   g         P  ^^  ^^^^.^^^  ^^  ^^^^^ 

;Stts;Selrprch  W  and  liberty  caps  were 

success  that  France  soon  ^"«<i  °'  P^^^^^^  ^^^  ^„i„e  pre- 
It  was  in  this  same  year  Cn9«  that  t 

li6l 


I 


(( 


THE"       NORTH       A   M   E   R  I   C   A 


though  on  account  of  the  French  seizures  the  loss  claims 
had  mounted  into  immense  figures.  The  company's 
directors  were,  of  course,  greatly  agitated  over  the  losses 
sustained  through  French  depredations  and  many  com- 
mittees were  named  to  gather  information,  resulting  m 
an  agreement  "not  to  insure  to  French  ports  unless  with 
a  warranty  against  capture  and  seizure  by  the  French." 

In  1798  the  North  America'a^VP^^s  were  divided 
into  first  and  second  classes,  th%^^r.^  the  first  being 
$6,000  at  a  minimum  of  "a  half  P^^gfJ^M^er  annum"  and 
on  the  second  class,  $4,000  at  a*- minimum  of  "three- 
fourths  per  cent  annually."  Wooden  buildings  were 
written  and  "when  two  or  more  wooden  buildings  adjoin, 
a  larger  premium  shaU  be  required  than  is  demanded  on  a 
single  wooden  building." 

On  February  27  of  the  same  year,  the  board  declined 
an  offer  of  an  agency  at  Charleston,  S.  C,  "to  take  risks 
against  fire"  and  on  April  19  offered  $1,000  reward  for 
"discovering  and  prosecuting"  the  supposed  incendiary 
of  a  Maiden  Lane  (New  York)   risk. 

As  the  company  was  chartered  as  a  "general  insurance 
company"  it  had  the  powers  possessed  by  the  British 
companies  to  write  aU  sorts  of  insurance,  including  life 
insurance.  That  branch  was  practically  unknown  in  the 
early  days  of  the  United  States  and  the  North  Amenca 
went  into  it  rather  experimentally  in  1794.  It  was 
scarcely  life  insurance  as  understood  now;  it  was  more  a 
hazardous  accident  business  that  was  demanded  and  which 
it  undertook  to  supply.  The  idea  was  short  term  insurance 
"against  capture  by  Algerian  pirates  or  Barbary  Cor- 
sairs" and  against  death  during  captivity  before  ransom, 
and  insurances  on  the  lives  of  those  going  on  hazardous 
•  journeys.  The  premiums  ran  as  high  as  eight  and  ten 
per  cent  for  the  term,  but  few  policies  were  issued  nor  did 
any  losses  occur  under  them.  This  life  insurance  experi- 
ment was  wholly  discontinued  in  1804. 

I17I 


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EPISODES        OF       HISTORY 


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11 


I  i 


President  Adams  did  not  get  through  his  administra- 
tion without  a  rebellion  (1798)  in  which  he,  too,  was  forced 
to  follow  Washington's  lead  and  call  out  the  militia  to 
collect  a  direct  tax  on  the  people,  the  first  in  our  history. 
Certain  Pennsylvania  farmers  refused  to  make  their  re- 
turns and  drove  off  the  assessors  who  came  to  "measure 
the  houses"  and  ''count  the  windows,"  which  were  then 
a  means  of  determining  values.  Some  of  the  leaders  were 
arrested  but  were  rescued  by  John  Fries,  who  was  finally 
taken  by  the  militia,  tried  for  treason  and  sentenced  to  be 
hanged,  but  was  pardoned. 

HISTORICAL  MEMORANDA.  1794-1799 

Governmental. —  Diplomatic  struggle  with  England  and  France  over  neu- 
trality—  First  treaty  with  Spain  signed  (179s)  defining  boundaries  of  Louisiana 
and  Florida  and  opening  the  Mississippi  to  trade  —  Naval  war  with  France  over 
Jay's  treaty  with  England  began  in  1798  and  confined  to  the  sea  entirely  —  Fall 
of  French  Directory  puts  an  end  to  war  and  convention  of  peace  signed  with 
Napoleon  I,  1800. 

Economic. —  The  first  carpet  was  woven  —  The  first  cotton  factory  opened 

—  The  first  newspaper  was  printed  in  the  territory  northwest  of  the  Ohio  River 

—  The  first  geography  of  the  United  States  was  published  —  Daily  papers  were 
first  printed  in  Baltimore  and  Boston  —  Anthracite  coal  was  discovered  in 
Pennsylvania  —  Eli  Whitney  invented  the  cotton  gin  (engine)  —  Cotton  ex- 
ports jumped  to  6,000,000  pounds  —  Samuel  Slater  built  the  first  mill  for  making 
cotton  yams  —  Cotton  sewing  thread  was  first  manufactured  in  the  United 
States  at  Pawtucket,  R.  I. —  The  first  turnpike  road  from  Philadelphia  to  Lan- 
caster (62  miles  long)  was  completed  —  Eli  Terry  began  the  manufacture  o 
clocks  as  a  business. 

Political. —  Washington  declines  third  term  and  issues  farewell  address  — 
John  Adams  (Federalist)  elected  President;  Thomas  Jefferson  (Republican) 
Vice-President  —  Federalists  still  in  control  with  Republicans  gaining  ground  — 
Tennessee  admitted  as  a  state  —  Eleventh  amendment  defining  judicial  powers 
adopted  —  Kentucky  and  Virginia  Resolutions  of  1798  adopted  declaring  the 
Constitution  a  compact  or  contract,  laying  the  basis  of  State's  Rights  —  Alien 
and  Sedition  laws  passed  and  challenged. 

Insurance. —  Great  losses  to  marine  insurance  through  French,  Spanish  and 
English  wars  —  Fire  insurance  enlarges,  but  on  small  scale  —  First  attempts  at 
fire  classification  by  the  North  America  —  Success  of  company  encourages  stock 
competition  —  Charles  Pet  tit,  second  president,  January  13,  1796,  to  January  9, 
1798,  re-elected  July  8, 1799;  Joseph  Ball,  third  president,  from  January  9, 1798 
to  July  8, 1799. 

[18I 


EXPANSION  AND  PERMANENCE 

1800-1816 

The  opening  of  the  Nineteenth  Century  saw  deep  foun- 
dations being  laid  both  for  the  new  republic  and  the  new 
Insurance  Company  of  North  America.  But  these  foun- 
dations were  laid  in  the  midst  of  uncertainties,  among 
which  those  who  were  with  resolute  courage  building  the 
republic  and  the  company  pursued  their  plans  un- 
daunted. 

The  present  capital  city  of  Washington  was  occupied 
as  the  seat  of  government  for  the  first  time  in  the  summer 
of  1800.  It  had  been  for  years  unceasingly  planned  for 
by  Samuel  Blodget,  Jr.,  one  of  the  organizers  and  the  first 
director  of  the  Insurance  Company  of  North  America, 
who  had  served  in  the  Revolutionary  War  on  the  staff  of 
General  Washington,  and  who  was  a  successful  East  India 
merchant  and  one  of  the  most  active  promoters  of  under- 
writing in  Philadelphia.  Selected  ten  years  before  as  the 
seat  of  government.  Congress  had  agreed  to  assume  the 
war  debts  of  the  various  states  as  a  consideration  for 
delimiting  a  federal  district  free  from  the  local  control 
and  influence  of  any  of  the  states.  In  the  center  of  this 
territory  —  the  District  of  Columbia  —  Mr.  Blodget  had 
dreamed  of  and  planned  a  capital  city  that  was  to  be  the 
most  beautiful  in  the  world.  The  dream  had  its  first 
step  toward  realization  in  iSoo.  The  original  plans  have 
been  subject  both  to  modification  and  enlargement  as 
necessity  and  opportunity  demanded,  but  all  who  visit 
the  city  of  Washington  and  gaze  upon  the  panorama  of 
its  splendid  architecture,  broad  streets  and  beautiful 
parks  may  know  that  they  are  viewing  the  finest  capital 
city  in  the  world  —  a  realization  in  its  ultimate  of  a  dream 

[19I 


iJ 


f 


ttttfli--^*^--^-  =-'-»-"^--'^ 


' 


/ 


EPISODES        OF        HISTORY 


that  was  often  discussed  and  put  forward  in  the  directors' 
room  of  the  Insurance  Company  of  North  America. 

Philadelphia  had  been  the  capital  since  the  new  govern- 
ment was  organized,  but  during  the  last  decade  of  the 
Eighteenth  Century  that  city  had  suffered  from  recurring 
epidemics  of  yellow  fever  —  called  then  "the  Disorder" 
—  brought  by  trading  ships  from  the  West  Indies,  and  the 
capital  was  hastily  removed  to  Washington  to  escape 
further  danger.  Fourteen  years  later  the  British  cap- 
tured and  burned  Washington,  destroying  many  invalu- 
able archives  and  souvenirs.  Officers  of  the  government 
sought  refuge  for  a  short  time  in  Philadelphia,  where  the 
government  business  was  carried  on,  but  the  great  domes- 
tic and  foreign  policies  of  the  United  States  were  to  take 
permanent  form  in  the  new  capital. 

It  was  at  Washington  in  1 800-01  that  the  contest  for 
the  Presidency  between  Thomas  Jefferson  and  Aaron  Burr 
shook  the  very  foundations  of  national  politics.  These 
two  candidates  had  received  a  tie  vote  in  the  electoral 
college  and  the  election  of  a  President  was  thus  thrown 
into  the  lower  house  of  Congress.  Jefferson  won  by  a 
narrow  margin  after  a  bitter  controversy  and  Burr  was 
elected  Vice-President.  So  much  feeling  was  aroused  that 
the  Twelfth  Amendment  to  the  Constitution  was  adopted, 
regulating  the  action  of  the  electoral  college  by  the 
methods  now  in  existence.  ' 

Out  of  the  intense  rivalries  of  the  Jefferson-Burr  elec- 
tion grew  the  personal  and  political  feud  between  Aaron 
Burr  and  Alexander  Hamilton.  In  a  duel  outside  of  New 
York,  Burr  killed  Hamilton  in  1804.  The  results  of  this 
tragedy  embittered  politics  for  years.  Burr  was  com- 
pelled by  public  opinion  to  resign  the  Vice-Presidency. 
Then  ensued  the  episode  called  the  "Burr  Conspiracy," 
the  true  facts  of  which  will  always  be  disputed.  Burr  was 
accused  of  designs  to  form  a  separate  nation  or  empire  in 
the  Southwest  to  indulge  his  ambition  for  power.     He  was 

I20I 


(( 


THE 


if 


NORTH       AMERICA 


arrested,  prosecuted  under  Jefferson  in  the  celebrated 
trials  at  Frankfort,  Kentucky,  and  Richmond,  Virginia, 
and  acquitted.  Out  of  this  the  facts  of  the  celebrated 
"Spanish  Conspiracy"  were  brought  to  light,  not  involv- 
ing Burr,  but  General  Wilkinson  and  many  others,  and 
causing  great  political  scandal. 

It  was  at  the  inauguration  of  Jefferson  in  March,  1801, 
that  the  new  President  laid  two  foundations  of  democratic 
custom.  He  rode  into  town  on  horseback,  hitched  his 
horse  to  a  tree  and  walked  over  to  the  capitol  to  take 
the  oath  without  attendants  or  display.  Washington  and 
Adams  had  delivered  their  messages  to  Congress  by  per- 
sonally reading  them  before  the  two  houses  jointly  as- 
sembled. Jefferson  changed  this  by  sending  his  written 
message  to  Congress  to  be  read  by  the  secretaries  in 
separate  session.  This  custom  was  followed  by  all  the 
presidents  until  1913,  a  hundred  and  eleven  years  later, 
when  President  Wilson  returned  to  the  practice  of  Wash- 
ington and  Adams. 

The  hasty  removal  of  the  government  to  Washington, 
caused  by  the  epidemic  of  yellow  fever,  drove  the  officers 
of  the  Insurance  Company  of  North  America  to  German- 
town  in  1798  and  1799,  and  it  was  not  until  1804  that  they 
were  settled  with  permanency  in  the  immediate  vicinity 
of  their  present  location. 

The  yeast  of  national  and  commercial  expansion  began 
to  stir  at  this  time,  with  troubles  in  every  direction  We 
had  a  war  with  Tripoli  and  secured  the  freedom  of  our 
commerce  in  the  Mediterranean  without  tribute  to  pirates; 
the  disagreements  with  England  brought  on  our  declara- 
tion of  war  in  181 2  and  we  were  soon  fighting  on  the 
Canadian  frontier,  along  the  lakes,  along  the  Atlantic 
Coast  and  in  the  Gulf  of  Mexico.  We  could  not  take 
Canada,  but  we  drove  the  enemy  out  of  the  East,  where 
they  burned  Washington  and  attacked  Baltimore,  and 
after  three  years  Jackson,  in  1815,  decisively  defeated  the 

[21] 


')i|' 


] ' 


I  I 


EPISODES        OF        HISTORY 

British  under  Pakenham  at  New  Orleans,  although  a 
peace  treaty  had  been  signed  at  Ghent  a  month  before, 
news  of  which  reached  here  too  late  to  stop  hostilities. 

Development  was  rapid  during  all  this  turmoil.  We 
purchased  Louisiana  from  Napoleon  in  1803,  thus  opening 
the  Mississippi  and  its  tributaries  free  to  a  splendid  com- 
merce. We  sent  explorers  into  the  West  and  discovered 
and  set  up  our  claims  to  the  Oregon  country  that  were 
finally  to  give  us  the  Pacific  Coast.  The  discovery  of 
Pike's  Peak  was  the  sensation  of  the  early  quarter  of  the 
century  and  the  migration  of  population  to  the  West  and 
Far  West  began  in  a  steady  stream.  The  population  in- 
creased from  three  and  a  half  millions  in  1790  to  seven 
millions  in  18 10,  and  the  area  of  the  United  States  grew 
from  eight  hundred  thousand  square  miles  to  two  millions. 
Towns  began  to  spring  up,  roads  and  bridges  were  built, 
manufactures  began,  agriculture  flourished  and  commerce 
was  enlarging  by  leaps  and  bounds. 

It  is  interesting  to  record  that  the  Insurance  Com- 
pany of  North  America,  which  was  "  following  the  flag 
and  the  Constitution"  at  every  step  in  this  expansion  of 
national  territory  and  its  settlement,  is  without  doubt 
the  founder  of  what  is  now  known  as  the  American 
Agency  System.  While  in  1798  the  directors  voted  "that 
it  is  not  expedient  to  have  an  agent  at  Charleston,  au- 
thorized to  take  risks  against  fire,"  which  is  the  first  dis- 
covered reference  to  agency  discussion,  the  directors  in 
1807  considered  a  memorial  from  Alexander  Henry  on 
"extending  insurance  against  fire  to  Lexington,  Ky." 
and  a  committee,  appointed  to  consider  the  whole  sub- 
ject, reported  favorably  December  7  and  further  author- 
ized the  president  "to  appoint  suitable  and  trusted  per- 
sons at  such  places  as  he  shall  think  advisable  to  act  as 
surveyors  and  agents  of  the  company."  The  Lexington 
authority  is  the  first  record  of  a  commissioned  agent. 
Early  agents  received  no  commissions  on  premiums  but 

[22] 


it 


THE 


ft 


NORTH       AMERICA 


retained  policy  and  survey  fees.  Later,  5  per  cent  on  the 
premium  was  allowed  and  from  this  point  the  whole 
agency  fabric  was  developed. 

From  1800  the  North  America  extended  its  business 
along  the  Atlantic  Coast,  and  in  1808  it  was  pursuing 
the  course  of  empire  westward,  appointing  agents  in  Ohio, 
Kentucky  and  Tennessee,  following  close  in  the  footsteps 
of  commerce.  There  were  few  towns  then  in  what  is  now 
the  great  Middle  West  —  Lexington,  Frankfort  and 
Louisville  in  Kentucky,  Cincinnati,  Chillicothe,  Steu- 
benville  in  Ohio,  Nashville  in  Tennessee,  being  the  centers 
of  population.  They  had  only  a  few  hundreds  of  in- 
habitants each,  but,  as  centers  of  collection  and  distribu- 
tion for  agricultural  and  manufacturing  products  over 
large  areas,  they  were  important  points  for  the  growing 
republic,  and  enormous  values  in  property  passed  through 
them.  And  there  the  Insurance  Company  of  North 
America  through  resident  agents  was  keeping  step  to  the 
music  of  national  development.  Some  of  those  early 
agents  remained  for  years  in  the  company's  service  and 
at  every  important  point  where  it  set  up  its  agency  then, 
it  has  continued  to  have  an  agency  down  to  this  day. 

There  were  contracts  of  insurance  written,  however,  in 
towns  and  cities  where  no  agents  resided.  Fire  insurance 
then  was  indeed  a  curiously  primitive  sort  of  business  when 
viewed  in  the  light  of  the  present  day.  Every  month  the 
Philadelphia  papers  contained  a  printed  list  of  insurance 
policies  of  the  North  America  that  would  expire  the 
following  month  and  that  was  the  only  notice  the  policy- 
holders had  to  renew  if  they  would  be  protected.  They 
had  to  take  a  Philadelphia  paper  then  or  be  lost  as  to  the 
news  of  the  world  and  their  business  interests.  Only 
persons  of  well-known  standing  and  responsibility  could 
obtain  insurance.  There  was  no  solicitation  for  business 
except  as  the  officers  of  the  company  issued  "proposals 
for  insurance"  and  sent  them  to  persons  whose  business 

[23] 


'  ■  1 


l» 


) 


1 1' 


!l 


)    ! 


*    I 


EPISODES        OF       HISTORY 

they  desired,  or  had  them  printed  in  newspapers  for  the 
information  of  those  concerned. 

It  is  interesting  to  read  the  new  "Proposals"  of  the 
Insurance  Company  of  North  America  issued  in  1806, 
when  the  scope  of  its  fire  underwriting  was  enlarged.  It 
will  be  observed  that  four  classes  were  now  established: 
(i)  brick  or  stone  with  slate  or  metal  roof,  (2)  same  with 
wooden  roof,  (3)  partly  wooden  buildings  with  either 
roofs  and  (4)  wooden  buildings,  with  wooden  roofs. 
Contents,  whether  merchandise,  household  furniture, 
apparel,  etc.,  went  with  the  buildings  under  the  same  rate, 
although  the  amounts  were  scheduled  and  limited. 

It  is  probable  that  very  few  fire  insurance  men  of 
to-day  have  ever  had  the  opportunity  to  read  these  "pro- 
posals," which  cover  the  entire  scope  and  conditions  of  the 
policy  and  represent  the  very  "last  word"  in  progressive 
fire  underwriting  announced  by  the  North  America  in 
1806.    As  a  curiosity  they  are  here  given  in  full: 

INSURANCE 

Against  loss  or  damage  by  fire  by  the  Insurance  Co.  of  North 

America. 

The  President  and  Directors  of  the  Insurance  Co.  of  North 
America,  in  the  City  of  Philadelphia,  being  desirous  to  employ 
the  capital  of  said  company  to  purposes  useful  to  the  public  as 
well  as  beneficial  to  the  institution,  have  resolved  to  extend  their 
insurances  against  loss  or  damage  by  fire,  into  diflferent  parts  of 
the  United  States;  on  buildings  of  ever>'  description  as  well  as  on 
goods,  wares  and  merchandize  of  all  kinds.  And  upon  such 
moderate  and  liberal  terms,  as  it  is  presumed  will  induce  many  to 
avail  themselves  of  the  means  thus  offered,  to  protect  themselves 
from  the  destructive  injury  so  frequently  occasioned  by  fire. 

Among  the  various  claims  which  have  been  made  against  the 
company  for  losses  by  fire  since  its  first  establishment  (now  more 
than  thirteen  years)  no  instance  of  a  legal  controversy  has  oc- 
curred, between  the  company  and  the  assured. —  But  on  the 
contrary,  all  claims  for  losses  of  this  nature  have  been  adjusted 
and  paid  with  the  utmost  promptitude;  which  circumstance, 
together  with  the  ample  capital  the  company  possess  gives  them 
a  fair  claim  to  publick  confidence. 


II 


THE 


i* 


NORTH        AMERICA 


Rates  of  annual  premiums  to  be  paid  for  assurances  against 
fire. 

No.  I. 

Hazards  of  the  First  Class,  viz: 

Brick  or  stone  building,  covered  with  tile,  slate  or  metal. 

Furniture  or  merchandize,  not  hazardous  contained  in  such 

buildings. 

For  sums  not  exceeding  10,000  dols.  in  one  risk,  from  25  to  30 
cents,  per  annum  per  100  dols. 

No.  II. 

Hazards  of  the  Second  Class,  viz: 

Brick  or  stone  buildings  covered  with  boards  or  shingles. 

Furniture  or  merchandize,  not  hazardous  contained  in  such 
buildings. 

For  sums  not  exceeding  10,000  dols.  in  one  risk,  from  30  to  40 
cents  per  annum  per  100  dols. 

No.  III. 

Hazards  of  the  Third  Class,  viz: 

Buildings  the  walls  of  which  are  partly  constructed  with 
bricks  or  stone,  and  partly  with  wood. 

Furniture  or  merchandize  contained  in  such  buildings. 

For  sums  not  exceeding  10,000  dols.  in  one  risk,  from  40  to  50 
cents  per  annum  per  100  dols. 

No.  IV. 

Hazards  of  the  Fourth  Class,  viz: 

Slight  wooden  buildings  covered  with  boards  or  shingles. 
Furniture  or  merchandize  contained  in  such  buildings. 
For  sums  not  exceeding  10,000  dols.  in  one  risk  from  75  to  100 
cents  per  annum  per  100  dols. 

All  buildings  adjoining  to  or  situated  near  to  hazardous 
buildings,  or  in  which  hazardous  goods  are  kept,  or  hazardous 
business  carried  on,  will  be  charged  at  an  extra  premium:  subject 
to  such  variations  as  the  nature  of  the  risk  may  require. 

The  following  articles  are  deemed  extra  hazardous,  and  also 
bufldings  in  which  they,  or  any  of  them  are  contained,  though  in 
various  degrees,  to  wit:  Pitch,  tar,  turpentine,  rosin,  wax,  tallow, 
oil,  ardent  spirits,  sulphur,  hemp,  flax,  cotton,  glass  and  china- 
ware,  especially  if  unpacked,  looking  glasses,  jewellery  and  all 
articles  more  than  commonly  liable  to  injury  by  wet,  sudden  re- 
moval, or  theft,  or  on  an  alarm  of  fire. 

l2Sl 


i 


> 


< 


I 


EPISODES        OF        HISTORY 

Buildings  in  which  the  following  occupations  are  carried  on 
are  also  extra  hazardous,  to  wit:  Tallow-chandlers,  brewers,  hemp 
and  flax  dressers,  painters,  coopers,  carpenters,  cabinet-makers, 
coach  or  carriage  makers,  malthouses,  bakers,  ship-chandlers, 
boat  builders,  rope  makers,  sugar  refiners,  distillers,  chymists, 
varnish  or  turpentine  works,  theatres,  mills,  and  machinery  gen- 
erally. 

Conditions  op  Insurance. 

I.  Persons  desirous  to  make  insurance  on  buildings  in  places 
where  the  Company  have  no  agent,  must  accompany  their 
applications  with  a  description  of  the  property  to  be  insured,  to 
be  made  by  a  master  carpenter,  and  signed  by  him  as  well  as  by 
the  owner  or  applicant,  and  attested  before  a  notary  or  magistrate, 
who  will  certify  his  knowledge  of  the  parties  and  their  credibility. 
The  site  and  position  of  the  building  must  be  describe<l;  the  street 
or  road  on  which  it  stands;  its  contiguity  to  water,  and  partic- 
ularly whether  any  or  what  fire  companies  are  established,  and 
engines  provided  in  the  place  or  neighbourhood.  The  materials 
of  which  it  is  built,  how  secured  by  battlements  or  party  walls, 
what  kind  of  access  to  the  top  of  the  ho-ise,  and  how  the  ashes 
are  generally  deposited. 

II.  The  dimensions  of  the  building,  the  style  in  which  it 
is  finished,  and  how  occupied,  whether  merely  as  a  dwelling  house, 
or  for  any  other  purpose,  and  for  what  purpose,  also,  an  estimate 
of  the  value  of  the  building,  independent  of  the  ground. 

III.  The  situation  with  respect  to  other  buildings  or  back 
buildings,  whether  adjoining  or  not;  comprehending  at  least  one 
hundred  feet  each  way.  What  kind  of  buildings  are  within  that 
distance,  how  built,  of  what  materials,  how  occupied,  whether  as 
private  dwellings  or  otherwise. 

IV.  No  insurance  will  be  effected  on  more  than  two  contiguous 
buildings,  if  built  of  wood,  or  on  property  therein;  nor  on  more 
than  three  contiguous  buildings  if  built  of  brick  or  stone,  or  prop- 
erty therein  —  And  there  must  be  a  space  of  at  least  fifty  feet 
between  such  wooden  buildings  and  any  other  property  insured, 
and  a  space  of  thirty  feet,  between  such  brick  or  stone  buildings 
and  any  other  property  insured. 

V.  No  insurance  will  be  effected  on  any  wooden  buildings,  or 
on  any  property  therein,  to  an  amount  exceeding  two- thirds  the 
value  thereof. 

VI.  When  insurance  is  wanted  on  goods,  a  general  description 
of  the  building  in  which  they  are  kept  must  be  given,  similar  in  all 
respects,  as  to  danger  from  fire,  with  that  required  for  insurance  on 

[26] 


"THE"        NORTH       AMERICA 


the  buildings  themselves,  with  a  description  of  the  kind  and 
nature  of  the  goods,  whether  in  packages  or  open. 

VII.  If  any  person  shall  insure  any  building  or  goods,  and 
shall  cause  the  same  to  be  described  otherwise  than  as  they  really 
are,  so  as  the  same  be  charged  at  a  lower  rate  of  premium  than 
would  be  demanded  if  the  true  situation  thereof  were  made  known, 
such  insurance  shall  be  void. 

VIII.  No  insurance  is  binding  until  the  stipulated  premium 
be  paid,  but  it  shall  be  deemed  effectual  from  the  time  of  such 
payment  whether  the  policy  be  signed  or  not.—  And  insurances 
may  be  continued  or  renewed  at  the  expiration  of  the  term  of  the 
policy,  without  further  expense  than  the  payment  of  the  premium 
of  the  renewed  term;  provided  the  circumstance  of  the  risk  re- 
main as  when  first  insured,  or  it  is  not  increased. 

IX.  If  any  other  insurance  be  made  on  the  same  property, 
notice  thereof  must  be  given  to  this  office,  and  indorsed  on  the 
policy,  otherwise  the  insurance  will  be  void.  And  in  case  of  such 
insurance  each  office  shall  bear  a  ratable  proportion  of  any  loss 
which  may  be  sustained. 

X.  Goods  held  in  trust,  or  on  consignment  may  be  insured 
as  such  in  a  separate  policy,  but  they  are  not  to  be  considered  as 
insured  otherwise.  Nor  are  bills  of  exchange,  bonds  and  other 
securities,  title  deeds,  money,  bank  and  other  notes,  or  mirrours, 
unless  by  special  agreement. 

XI.  This  company  will  not  be  liable  or  accountable  for 
any  loss  or  damage  occasioned  by  the  invasion  of  an  enemy,  or  by 
any  military  or  usurped  force,  or  by  reason  of  any  civil  commotion, 
or  occasioned  by  gunpowder,  aqua  fortis,  or  anything  of  the  like 
kind  kept  in  buildings,  or  among  the  property  insured,  unless  by 
special  agreement. 

XII.  No  insurance  will  be  made  on  buildings  for  a  shorter 
term  than  one  year,  nor  for  a  longer  term  than  seven  years. 
Persons  who  insure  for  seven  years  shall  be  allowed  one  year's 
premium  as  a  discount;  and  one-third  of  a  year's  premium  on  an 
insurance  for  three  years.  Insurance  may,  however,  be  effected 
on  goods  in  packages,  for  any  term  not  less  than  sixty  days. 

XIII.  Losses  sustained  by  fire  on  property  insured  in  this 
office,  shall  be  paid  in  thirty  days  after  due  proof  and  liquidation 
thereof,  without  deduction;  and  it  is  to  be  understood  that  the 
Company  make  good  losses  on  property  insured  by  them  if  burnt 
by  lightning,  and  also  any  damage  which  goods  may  sustain  by 
wet,  sudden  removal  or  theft,  when  it  happens  by  means  or  in 
consequence  of  a  fire. 

XIV.  Letters  of  inquiry  (post  paid)  and  orders  for  insurance 

[27I 


M 


i  1 


k 


1l 


EPISODES        OF       HISTORY 

accompanied  by  the  means  of  paying  the  premium,  will  be  prompt- 
ly attended  to,  if  addressed  to 

John  Inskeep,  President. 
Insurance  office  of  North  America,  Philad'a. 

This  curious  document  was  printed  on  a  ** broadside" 
bearing  at  the  top  an  excellent  wood  engraving  of  a  mid- 
night fire  in  a  two-story  house,  with  firemen  and  hand  en- 
gines at  work.  Almost,  as  if  by  presentiment,  the  build- 
ing has  much  the  appearance  of  and  the  scene  is  singularly 
alike  to  the  old-time  engraving  prepared  five  years  later 
of  the  burning  of  the  theater  at  Richmond,  Va.,  in  which 
sixty  persons  lost  their  lives,  the  first  sensational  fire  of 
that  kind  in  the  United  States. 

Looking  closely  at  the  advances  of  fire  insurance,  it  is 
curious  to  note  how  closely  allied  were  the  experiences,  the 
interests  and  the  ultimate  fortunes  of  the  United  States 
and  the  Insurance  Company  of  North  America.  The 
national  government  that  had  considered  its  foreign  re- 
lations and  problems  of  the  greatest  importance  began 
now  to  find  that  the  development  of  its  own  domain  was 
infinitely  greater.  The  North  America,  that  had  regarded 
fire  insurance  as  a  mere  experiment  aside  from  ocean 
marine  insurance,  began  to  find  in  inland  marine  and  fire 
insurance  opportunities  for  revenue  and  energy  that  were 
in  the  future  to  render  the  ocean  marine  business  of  the 
United  States  a  small  venture  by  comparison. 

Blight  fell  upon  American  ocean  marine  insurance 
first  in  1798  when  the  naval  war  with  France  was  in 
progress.  The  histories  of  the  United  States  and  of  the 
Insurance  Company  of  North  America  are  bound  together 
in  every  step  of  it.  President  Adams  suspended  all 
French  consuls,  and  the  North  America  backed  him 
up  by  refusing  to  insure  any  ships  or  cargoes  to  French 
ports.  Commodore  Decatur  in  the  ''Delaware"  fought 
and  captured  the  French  privateer,  "La  Croyable,"  and 
then  began  a  campaign  that  put  all  American  ships  in 

[28] 


It 


THE 


>» 


NORTH       AMERICA 


jeopardy,  increased  losses  enormously  and  of  course 
stopped  premiums  by  putting  an  end  to  marine  insurance 
for  the  time  being.  The  marine  insurance  rate  of  the 
Insurance  Company  of  North  America  during  the  first 
ten  years  of  its  existence  averaged  twelve  per  cent! 
Its  premiums  aggregated  during  that  time  $6,037,457 
and  its  losses  $5,500,887  or  91. 11  per  cent  of  the  premiums, 
leaving  only  8.99  per  cent  to  cover  expenses. 

Opening  of  the  second  war  with  England  in  181 2 
almost  destroyed  the  marine  business  again,  premiums 
falling  to  $1,364,637  in  the  decade  from  1803  to  1813. 
There  was  very  little  marine  business  after  that  for  thirty 
years,  American  shipping  having  been  almost  entirely  with- 
drawn from  the  seas.  The  acquirement  of  Texas  and 
California  alone  reopened  the  way  to  large  writings  after 
1845. 

During  this  period  the  insurance  idea  of  which  the 
North  America  was  the  pioneer  began  to  grow  in  the  east- 
ern states  and  other  companies  were  formed  in  localities, 
mostly  for  home  protection.  Every  considerable  town  be- 
gan to  organize  its  fire  insurance  company  in  which  the 
neighbors  were  expected  to  insure.  There  was  no  founda- 
tion of  experience  and  many  of  these  came  to  grief  within 
a  few  years  after  they  were  established.  But  the  be- 
ginnings were  made  then  of  the  business  of  fire  insurance  in 
the  United  States  on  a  general  scale. 


, 


HISTORICAL  MEMORANDA,  1800-1816 

Governmental. —  National  capital  removed  to  Washington  —  Jefferson 
elected  President  (i8oo)  and  re-elected  (1804)  —  Purchase  of  Louisiana  from 
Napoleon,  1803-04  —  Exploration  of  the  Far  West  begun  —  Ohio  admitted,  181 2 

—  Territories  of  Mississippi,  Indiana,  Orleans,  Michigan  and  Illinois  created. 

Economic. —  Manufacturing  began,  resulting  from  embargo  on  shipping  — 
Charters  were  granted  for  iron  works,  paper  mills,  thread  works,  factories  for 
cotton  and  woolen  goods,  oil  cloth,  boots  and  shoes  and  rope  —  Census  of  1810 
showed  value  of  manufactured  products  $173,000,000  and  population  7,210,000 

—  Government  encouraged  road  building  by  beginning  the  national  road  from 
Cumberland,  Md.,to  Wheeling,  W.  Va.—  First  steamboat  on  Ohio  and  Missis- 

I29I 


Ill 


\\i 


M 


EPISODES       OF       HISTORY 

sippi  rivers,  1811  —  Second  money  panic  in  181 4  and  suspension  of  payment  by 
many  banks  in  the  East  and  West. 

War. —  United  States  declared  war  on  England  in  181 2  because  of  inter- 
ference with  our  shipping  growing  out  of  neutrality  policy  in  Anglo-French  war  — 
Battle  of  New  Orleans  fought  January  8,  181 5,  a  month  after  peace  had  been 
arranged  before  news  could  reach  the  armies. 

Insurance. —  Ebenezer  Hazard  retired  from  the  secretaryship  of  the  In- 
surance Company  of  North  America,  January  13, 1800,  leaving  that  office  vacant 
until  February  26, 1806,  when  Robert  S.  Stephens  was  placed  in  the  office  —  John 
M.  Nesbitt,  first  president  of  the  company,  died  January  22,  1802,  and  Charles 
Pettit,  second  president  and  re-elected  after  Joseph  Ball  had  been  in  office  for 
eighteen  months,  died  September  3,  1803  —  John  Inskeep  placed  in  the  presi- 
dency October  i,  1806  —  Beginning  of  agency  system  —  First  agents  n  the 
West  appointed,  1807-8  —  Four  classes  in  risks  established  1806. 


[30I 


II! 


THE  ERA  OF  NATION  BUILDING 

1817-1841 

The  year  181 7  ushered  in  a  remarkable  quarter  of  a 
century  in  nation  building.  The  like  of  it  was  never  be- 
fore recorded  in  history  and  its  achievements  were  never 
surpassed  by  any  people.  The  impulse  sprang  up  with 
the  defeat  of  Napoleon  at  Waterloo  and  the  coming  of  a 
general  peace  in  Europe.  The  diflFerences  of  sympathy 
that  had  divided  the  people  of  the  United  States,  and  the 
war  policies  of  foreign  governments  that  had  destroyed  our 
commerce  on  the  seas,  were  alike  at  an  end.  Peace  with 
England  at  once  released  the  energies  of  Americans  for 
the  upbuilding  of  their  own  country. 

All  this  was  emphasized  by  the  election  of  James 
Monroe  as  President.  When  he  went  into  office  on  March 
4,  1 81 7,  there  broke  forth  at  once  a  great  wave  of  enthusi- 
astic feeling  in  favor  of  home  development.  Monroe's 
election  was  the  death-knell  of  the  Federal  Party,  which 
never  afterward  put  out  a  candidate  or  was  signally  active 
in  public  affairs.  There  was  practically  but  one  party  now, 
which  was  known  as  the  Republican,  but  finally  became 
known  as  the  Democratic  Party,  as  it  has  ever  since 
been  called.  Differences  as  to  domestic  policies  brought 
other  factions  forward  in  time  and  the  National  Re- 
publicans, Antislavery  and  Whig  parties  were  formed, 
not  one  of  which  could  win  success  until  1840,  when 
the  Whigs  nominated  and  triumphantly  elected  General 
William  Henry  Harrison  ("Old  Tippecanoe "),  with  John 
Tyler  of  Virginia,  a  former  Democrat,  for  Vice-President. 
Harrison's  death,  a  month  after  inauguration,  left  a 
Democratic  President  in  office. 

What  was  known  as  the  "Era  of  Good  Feeling"  began 

[31] 


/ 


'H 


r» 


If 


.  ( 


E   P   ISODES        OF        HISTORY 

in  1 817;  when  President  Monroe  was  received  with  en- 
thusiasm everywhere  and  political  animosities  were  laid 
aside.  Thenceforth  the  questions  that  concerned  politics 
were  how  to  define  accurately  the  new  boundaries  of  the 
national  domain,  to  consolidate,  upbuild  and  protect  it. 
We  had  much  diplomatic  controversy  with  England  as  to 
the  Canadian  line  and  the  Oregon  country;  with  Spain  as 
to  the  Florida  country;  with  Russia  as  to  her  claims  on  the 

Pacific  Coast. 

Out  of  this  the  Monroe  Doctrine  finally  emerged  as 
the  triumphant  principle  of  the  new  republic  regarding 
the  two  American  continents.  Since  1793  it  had  been 
the  open  policy  of  the  United  States  to  take  no  part  in 
European  wars  nor  meddle  in  European  politics.  The 
purpose  was  to  avoid  entanglements  with  foreign  nations 
that  might  react  upon  our  own  desire  to  be  left  alone  in 
peace  and  amity  with  the  world.  Meanwhile,  Spain's 
colonies  in  South  America  were  rebelling  and  forming 
themselves  into  independent  republics;  England  was 
pressing  against  us  in  the  North  and  Russia  in  California. 
The  result  was  in  181 5  the  formation  of  what  was  called 
the  "Holy  Alliance"  of  European  countries  to  maintain 
the  principle  of  monarchical  government  wherever  it 
existed.  In  1822  the  United  States  answered  this  by 
acknowledging  the  independence  of  the  new  republics  of 
Chile,  Peru,  Buenos  Ayres  (now  Argentina),  and  Colom- 
bia. The  Holy  Alliance  called  a  congress  to  take  action, 
but  Great  Britain  found  it  to  her  interests  to  hold  aloof, 
and  in  1823  suggested  that  we  unite  with  her  in  a  protest 
against  European  intervention  in  South  America. 

To  this  President  Monroe  thought  best  to  make  a 
declaration  that  would  be  wholly  independent  of  Great 
Britain's  attitude.  In  his  message  to  Congress,  December, 
1823,  he  laid  down  three  great  guiding  principles,  which, 
with  some  variation  and  growth,  have  since  been  known  as 
the  "Monroe  Doctrine,"  applying   to  Great  Britain  as 

[3*1 


(( 


THE"        NORTH       AMERICA 


well  as  to  all  other  countries.     These  three  principles  have 
been  thus  summarized: 

1.  That  the  two  American  continents  were  no  longer 
open  to  colonization. 

2.  That  the  United  States  would  not  meddle  in  the 
political  affairs  of  Europe. 

3.  That  European  governments  must  not  extend  their 
system  to  any  part  of  North  or  South  America,  nor  op- 
press, nor  in  any  other  manner  seek  to  control  the  destiny 
of  any  of  the  nations  of  this  hemisphere. 

The  declaration  was  effectual  and  from  that  day  to 
this  no  monarchy  and  no  European  country  has  success- 
fully challenged  it. 

Curiously  enough,  the  American  Minister  at  the  Court 
of  St.  James  was  Richard  Rush,  afterward  Attorney 
General  of  the  United  States,  (the  grandfather  of  the 
present  president  of  the  Insurance  Company  of  North 
America) .  It  is  history  that  he  conveyed  the  suggestion 
of  the  Monroe  Doctrine  to  President  Monroe. 

So  much  for  that  great  international  policy  which  closed 
the  two  Americas  to  European  politics. 

During  this  period  of  twenty-five  years,  the  "third 
term"  tradition  for  Presidents  was  erected  into  a  custom 
equal  to  an  unwritten  law.  Jefferson  had  declined  a  third 
election,  following  Washington's  example,  and  advised 
against  electing  any  President  for  a  third  term.  Madison 
followed  Jefferson's  example.  Monroe  was  re-elected  in 
1820,  receiving  every  vote  in  the  electoral  college  but  one. 
That  one  vote  was  cast  for  John  Quincy  Adams  by  an 
elector  from  New  Hampshire,  who  announced  that  he 
did  so  because  he  desired  to  preserve  for  Washington  the 
glory  of  being  the  only  man  ever  to  have  received  a  unan- 
imous vote  of  electors  for  President.  The  election  of 
1824  brought  on  the  long-continued  struggle  between 
Jackson  and  Clay.  There  were  no  political  parties,  but 
personal  factions,  known  as  "Jackson  men,"  "Clay"  or 

l3S] 


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E   P  I   SODES       OF       HISTORY 

**  Administration  men  "  and  "  Antimasonic."  These  latter 
were  against  the  Masonic  Society  as  threatening  the  safety 
of  the  republic,  which  is  amusing  these  days.  Jefferson, 
Madison  and  Monroe  having  all  declined  third  terms,  it 
remained  for  John  Quincy  Adams  to  be  the  first  one-term 
President,  as  he  failed  of  re-election  between  the  clashing 
forces  of  Jackson  and  Clay.  Jackson  was  elected  in  1828 
and  re-elected  in  1832.  In  1836  he,  too,  refused  to  be 
a  candidate  for  a  third  term,  and  so  set  his  stamp  of  ap- 
proval on  the  custom  against  third-term  candidates. 

In  1824,  under  the  leadership  of  Henry  Clay  in  Congress, 
the  first  protective  tariff  bill  was  enacted  and  at  the  same 
time  Congressional  appropriations  were  made  for  internal 
improvements,  one  feature  of  which  has  now  come  to  be 
known  in  politics  as  the  "Pork  Bill." 

Following  the  tariff  bill  of  1824  another  and  stronger  one 
was  passed  in  1828,  which  led  to  great  protests  in  the  sec- 
tions opposed  to  it,  and  Vice-President  John  C.  Calhoun 
put  himself  at  the  head  of  a  movement  by  popular  assem- 
blages to  declare  a  protective  tariff  unconstitutional,  null 
and  void,  and  advise  state  legislatures  how  to  nullify  it. 
President  Jackson  ordered  his  collectors  to  use  force,  if 
necessary,  to  collect  the  tariff  duties.  Vice-President 
Calhoun  resigned,  was  at  once  elected  Senator  from  South 
Carolina,  and  he  and  Daniel  Webster  had  a  great  debate 
in  the  Senate.  It  looked  as  if  civil  war  was  imminent, 
but  Henry  Clay  proposed  a  compromise  by  a  gradual  re- 
duction of  the  tariff  and  the  storm  subsided,  leaving,  how- 
ever, a  residuum  of  feeling  between  the  Eastern  and  North- 
ern states  and  the  South. 

The  first  national  political  conventions  to  nominate 
Presidential  candidates  were  held  in  1831-32.  The  Anti- 
masons  met  in  Baltimore  and  nominated  William  Wirt 
and  Amos  EUmaker;  the  National  Republicans  nom- 
inated Henry  Clay;  the  Democrats  met  and  nominated 
Martin  Van  Buren  for  Vice-President  only.    As  it  was 

l34l 


I 


"THE"        NORTH       AMERIC   A 

universally  accepted  that  Jackson  would  be  re-elected 
President,  the  Democrats  concluded  it  was  wise  to  let  him 
get  the  votes  without  arousing  opposition  by  a  formal 
nomination.  In  1832  a  national  convention  of  young  men 
of  National  Republican  sympathies  was  held  at  Washing- 
ton. The  Democrats  called  it  "Clay's  Infant  School," 
and  this  body  adopted  and  issued  the  first  party  platform 
in  the  United  States.  It  endorsed  protection  and  in- 
ternal improvements  by  the  government  and  denounced 
Jackson. 

During  the  latter  part  of  this  period  (in  1837  to  be 
exact),  the  second  and  greatest  financial  panic  occurred. 
Strange  to  say,  it  was  caused  by  the  national  government 
being  too  rich  and  the  people  of  the  states  generally  too 
prosperous  and  rioting  in  speculation.  Poverty  came  in  a 
day  because  there  was  too  much  wealth  on  paper  and 
none  in  the  pocket.  To  those  of  this  day  accustomed  to 
seemg  Congress  appropriate  more  than  a  billion  dollars 
at  every  session,  without  excitement,  the  wealth  of  the 
government  in  1836  will  seem  microscopic.  In  taking 
over  the  war  debts  of  the  states  in  1790  ($75,000,000),  and 
by  accretions  during  the  second  war  with  England,  the 
national  debt,  was  in  1816,  about  $127,000,000.  It  was 
all  paid  off  by  1835,  and  the  tariff  duties  and  sales  of  public 
lands  had  accumulated  in  the  Treasury  $41,500,000 
surplus.  Congress  puzzled  over  what  to  do  with  it  and 
finally  decided  to  keep  five  millions  of  it  for  a  surplus  and 
divide  the  remainder  among  the  states  according  to  Con- 
gressional representation. 

This  division  was  to  be  paid  out  in  four  installments 
during  1837.  Three  payments  were  actually  made,  but 
the  fourth,  due  October  i,  has  never  been  paid.  The 
withdrawal  of  the  money  from  the  banks  that  kept 
government  money  on  deposit  required  loans  to  be  called, 
with  the  result  that  credit  was  destroyed,  factories  closed, 
merchants  failed,  property  could  not  be  sold,  state  banks 

l3S] 


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HtfiiiUia 


E    P    I    S    ODES        OF        HISTORY 

suspended  specie  payment,  or  failed,  bread  riots  occurred 
and  the  country  was  plunged  into  the  most  acute  distress. 
The  struggle  over  the  United  States  Bank  between  the 
Jacksonians  and  the  anti-Jacksonians  was  the  political 
cause  of  the  panic,  the  effects  of  which  were  felt  for  years 
in  business  and  politics  as  well. 

During  all  the  political  excitement  of  this  period  the 
energies  of  the  people  found  employment  in  the  astonish- 
ing settlement  and  development  of  the  West.  Paralysis 
of  ocean  commerce  on  the  Atlantic  Coast  turned  the  eyes 
of  thousands  to  the  cheap  lands  of  the  West,  and  the 
natural  love  of  adventure  and  hope  of  fortune  did  the  rest. 
The  government  owned  the  land,  would  sell  it  to  all 
applicants  alike  on  the  installment  plan,  and  no  taxes 
could  be  levied  on  such  lands  for  five  years.  This  was 
the  government's  policy  to  relieve  unemployment  and 
settle  the  new  territories.     The  rush  began. 

Every  roadway  to  the  Mississippi  Valley  was  thronged 
with  caravans  from  the  East,  and  towns  and  villages 
sprang  up  like  mushrooms.  It  continued  for  years;  and 
the  stream  grew  larger  instead  of  smaller,  as  "hard  times" 
persisted  in  the  East.  In  many  localities  there  were 
extraordinary  "booms."  Lands  purchased  for  one  dollar 
an  acre,  upon  which  towns  were  settled,  were  sold  within 
twenty  years  at  from  fifty  dollars  to  seven  thousand  times 
that  price.  So  great  and  enthusiastic  was  the  migration 
that  highroads  and  rivers  were  crowded.  Many  marched 
out  on  foot,  with  gun  on  shoulder, and  "lived  on  the  land" 
until  they  found  the  place  that  invited  them  to  settle. 
One  town  in  western  Pennsylvania  kept  a  record  of  2001 
families  that  passed  through  its  turnpike  gate  in  one 
month,  all  going  West. 

Everywhere  quarter-sections  of  land  were  taken  up, 
log  houses  constructed  and  clearing  and  farming  begun. 
The  result  of  the  great  movement  of  travel  was  an  in- 
stant demand  for  better  ways  and  methods  of  transporta- 

[36I 


(( 


THE"        NORTH 


AMERICA 


tion,  not  only  for  the  travelers  themselves,  but  for  the 
supplies  they  would  need  and  the  products  of  the  farms 
they  would  have  to  send  to  markets.  The  eastern  sea- 
board had  roads,  and  steamboats  were  plying  upon  the 
principal  rivers.  Yet  it  took  twelve  and  fifteen  hours  by 
the  fastest  stages  to  go  from  Philadelphia  to  New  York 
and  forty-eight^hours  from  New  York  to  Boston.  There 
were  steamboats  on  the  Mississippi  and  Ohio,  but  there 
were  few  roads  and  no  connections  between  the  East  and 
West,  except  down  the  Ohio  and  around  by  sea  to  New 
Orleans.  The  steamboats  were  themselves  primitive 
affairs.  They  consumed  twenty-five  days  in  going  from 
New  Orleans  to  St.  Louis  and  Louisville.  In  one  year 
more  than  twelve  thousand  wagons  arrived  at  Pittsburgh 
from  Philadelphia  and  Baltimore,  bringing  goods  for  the 
West,  the  freight  charge  on  which  was  $1,500,000. 

Water  was  considered  the  most  feasible  method,  so 
canals  were  projected.  New  York,  in  order  to  capture 
trade  from  Philadelphia,  began  the  Albany  and  Erie  Canal 
under  the  leadership  of  DeWitt  Clinton.  It  was  opened 
in  1825,  and  so  great  was  the  glory  that  he  was  invited 
West  to  dig  the  first  sod  for  the  Louisville  and  Portland 
Canal  at  Louisville,  which  was  intended  to  enable  boats  to 
pass  the  falls  of  the  Ohio  without  breaking  cargo.  The 
Erie  Canal  reduced  freight  rates  from  Albany  to  Buffalo 
from  $1 20  a  ton  to  $14.  It  seemed  to  promise  a  millennium 
for  the  West  and  changed  the  condition  of  half  the  whole 
country. 

The  rivalry  between  New  York  and  Philadelphia  led 
to  the  project  of  a  canal  from  the  latter  to  Pittsburgh,  but 
before  it  was  completed  the  first  railroad  had  been  demon- 
strated and  in  1832  the  travel  route  between  these  two 
points  was  part  canal  and  part  rail.  This  was  the  begin- 
ning of  what  became  the  Baltimore  &  Ohio  Railroad.  It 
was  not  the  railroad  we  know  now,  but  consisted  merely  of 
wooden  rails  laid  upon  sleepers  over  which  small  cars  were 

[37I 


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I 


^'11 


E   P   I   S   O   PES        OF       HISTORY 

drawn  by  horses.  The  name  "railroad"  grew  from 
"railed  roads."  These  railroads  did  not  carry  passengers. 
Travelers  still  made  their  journeys  in  wagons  and  stages 
or  on  horseback. 

Locomotives  were  built  and  used  on  railroads  after 
1836,  but  they  were  so  expensive  that  the  state  of  Penn- 
sylvania built  and  owned  them  and  charged  for  hauling  the 

trains. 

Such  were  the  primitive  beginnings  of  the  great  steam- 
boat and  railway  eras  of  the  country.  But  the  use  of 
machinery  in  both  connections  developed  many  me- 
chanical inventions  for  labor  saving.  Threshing  ma- 
chines were  invented,  machinery  for  wood-working  fol- 
lowed and  manufactories  for  all  tools  and  instruments  that 
were  needed  began  to  spring  up.  All  these  had  previously 
been  imported. 

All  these  wonderful  activities  of  a  strong  and  restless 
people  seeking  homes  and  permanence  of  wealth  would,  in 
this  day,  open  unbounded  opportunities  for  the  business  of 
fire  insurance.  But  that  business  was  in  its  infancy  in  the 
first  half  of  the  last  century.  It  is  true  that  in  the  East 
local  companies  started  up  in  many  places,  but  mostly 
for  insurance  on  dwellings  and  established  business.  It 
was  the  exception  and  not  the  rule  then  in  most  commu- 
nities to  be  insured  against  fire.  Prior  to  1830  the  experi- 
ence of  all  insurance  companies  might  be  characterized 
as  of  alternate  prosperity  and  depression.  There  would  be 
periods  of  no  losses  and  large  profits  and  large  losses  and 
no  profits.  Fire  insurance  was  regarded  largely  as  a 
speculation,  founded  upon  the  traditions  of  dangerous 
adventure  amid  which  marine  insurance  had  been  pur- 
sued by  speculative  underwriters  in  every  maritime  na- 
tion. When  large  profits  were  made  they  were  promptly 
divided  and  the  carrying  out  of  contracts  still  running 
was  secured  only  by  the  capital  already  contributed  and 
by  the  honor  and  commercial  ambitions  of  stockholders 

I38I 


"THE"       NORTH       AMERICA 


who  were  considered  bound  to  live  up  to  their  under- 
takings or  be  ruined  in  public  estimation.  There  were  no 
attempts  at  maintaining  adequate  reserves  or  surplus. 
In  these  things  the  directors  of  the  North  America  were 
acting  as  all  other  underwriters  did.  In  1824  they  re- 
ceived payment  of  their  subrogation  claims  for  Spanish 
spoliations  and  immediately  paid  a  cash  dividend  of  60 
per  cent  on  the  stock,  the  dividend  amounting  to  $300,000. 
At  the  time  the  surplus  did  not  exceed  $20,000  to  protect  a 
capital  of  $500,000,  with  great  liabilities  outstanding. 

It  is  true  that  the  action  of  the  board  of  directors  in 
taking  this  step  was  doubtless  founded  upon  a  lively 
expectation  that  the  government  of  the  United  States 
would  as  a  matter  of  justice  appropriate  money  to  pay 
the  French  spoliation  claims.  The  amount  of  these 
claims  as  proved  was  $748,906.13,  and  the  government 
of  the  United  States  had  sought  redress  for  them  against 
France.  After  years  of  negotiation,  however,  our  govern- 
ment found  itself  confronted  by  counter  claims  of  France 
for  infractions  of  a  treaty  entered  into  in  1778.  In  1800 
the  whole  contention  of  our  government  was  suddenly 
abandoned  in  a  convention  with  Napoleon,  under  which 
the  claims  of  private  citizens  of  the  United  States  were 
surrendered  in  exchange  for  the  abandonment  by  France 
of  claims  for  losses  sustained  by  the  failure  to  observe  the 
treaty  stipulations. 

Nevertheless,  the  United  States  government  having 
had  the  benefit  of  the  use  of  these  private  claims  as  an 
offset  against  claims  against  the  government,  an  attempt 
was  begun  to  have  the  government  make  the  claims  good 
by  Congressional  appropriation.  All  such  attempts  are 
invariably  slow  and  attended  with  great  expectations  and 
great  disappointments. 

The  tremendous  hazards  of  marine  insurance  and 
the  fact  that  fire  insurance  was  negligible  in  volume  and 
purely  experimental,  effectually  covered  up  the  scientific 

[39] 


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t    i; 


EPISODES        OF        HISTORY 


elements  of  average,  adequate  rate,  reserves  and  sur- 
pluses. There  were  absolutely  no  statistics  beyond  the 
mere  computations  of  the  number  of  fires,  which  had  been 
made  in  England  a  century  before.  England  was  no 
better  off  than  America  in  respect  to  fire  insurance  and 
even  there  marine  insurance  was  a  gamble  at  Lloyds'.  In 
the  United  States  the  small  companies  that  began  to  be 
organized  were  mere  side  issues  of  merchants  whose  time 
was  almost  wholly  occupied  with  other  and  more  im- 
portant matters.  Amounts  were  insured  by  a  single 
company  on  a  single  risk  that  would  appall  the  under- 
writer of  to-day,  and  these  lines  were  not  reinsured. 

There  was  little  headway  made  in  fire  insurance  except 
by  the  companies  with  large  capital  that  were  trying  to 
penetrate  the  future.  Underwriters  had  yet  to  be  "  made  " 
and  changes  in  officials  were  frequent  in  the  effort  to  dis- 
cover underwriters  and  from  their  ideas  to  develop  pro- 
fessional employees.  There  gradually  sprang  up  a  body 
of  men  trained  and  devoted  to  underwriting,  but  this  was 
a  work  requiring  time  and  patience  under  many  dis- 
couragements. In  1806  John  Inskeep,  who  had  been  a 
hotel-keeper,  a  prosperous  merchant  in  the  China  trade 
and  mayor  of  Philadelphia,  was  elected  president  of  the 
Insurance  Company  of  North  America  and  his  energetic 
prosecution  of  its  affairs,  his  enlargement  of  its  field,  were 
attended  by  such  success  that  he  remained  in  the  presi- 
dency until  1 83 1  when  at  the  age  of  71  he  resigned  on 
account  of  increasing  age.  It  was  Mr.  Inskeep  who  col- 
lected the  Spanish  spoliation  claims  and  advised  the  60 
per  cent  dividend  in  1824.  The  board  presented  him  with 
a  service  of  silver  plate  valued  at  $500  in  recognition  of  his 
able  administration  of  its  affairs. 

It  is  interesting  to  note  amid  the  beginnings  of  fire 
insurance  that  the  Insurance  Company  of  North  America, 
the  pioneer  and  path-keeper  of  all  the  great  internal  nation 
building,  wrote  from  1793  to  1842  marine  premiums  ag- 

[40I 


({ 


THE"        NORTH        AMERICA 


gregating  $8,267,581,  while  its  fire  premiums  for  the  same 
period  aggregated  only  $425,091. 

Marine  insurance,  with  its  long  prestige  and  great 
chances  of  profit,  seems  to  have  had  always  a  fascination 
for  the  early  underwriters  of  every  country  with  maritime 
interests.  The  Insurance  Company  of  North  America, 
with  its  office  at  the  great  port  of  entry  at  Philadelphia, 
was  pushing  for  marine  business,  but  it  was  experimenting 
with  the  fire  business,  singularly  enough  for  the  reason  that 
it  had  few  losses  on  fire  insurance  and  the  profits  on  the 
fire  branch  were  relied  upon  to  pay  the  expenses  of  the 
marine  business.  (In  1822  its  fire  premiums  were 
$42,380.79,  without  a  single  dollar  of  loss  claims!)  And  on 
this  score  it  turned  out  to  be  a  most  profitable  experiment, 
since  from  18 13  to  1832  the  losses  on  fire  insurance  were 
less  than  15  per  cent  of  the  premiums,  while  the  marine 
premiums  had  fallen  off  greatly  as  a  result  of  wars  and 
changed  conditions  and  losses  were  very  heavy.  This 
experience  caused  the  company  to  develop  its  fire  in- 
surance with  the  interior  growth  of  the  country,  through 
its  western  agents,  with  the  result  that  from  1832  on- 
ward both  the  marine  and  fire  premiums  began  to  increase 
greatly.  The  effects  of  the  panic  of  1837  on  the  company's 
fire  business  are  shown  by  the  losses.  In  the  ten  years 
from  1813  to  1822  they  had  only  been  $1,569;  from  1823 
to  1832  they  were  only  $17,974;  from  1833  to  1842  they 
were  $78,948,  or  nearly  70  per  cent  of  the  premiums. 

The  panic  of  1837  played  havoc  with  small  insurance 
companies.  They  were  involved  with  the  banks  and  all 
commercial  enterprises.  Only  the  strong  and  large  com* 
panies  could  stem  the  storm.  The  public  demanded 
more  certainty  and  security  in  and  behind  the  contracts  of 
insurance.  Massachusetts  passed  in  1837  a  law  requiring 
companies  to  maintain  a  reserve  that  would  insure  the 
carrying  out  of  their  contracts.  This  was  called  the  "re- 
insurance reserve  fund"  and  is  now  the  unearned  premium 

[41] 


^ 


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EPISODES        OF       HISTORY 

fund  which  all  companies  everywhere  are  required  to 
maintain  to  protect  their  policy-holders  against  loss  of 
premium  on  policies  not  yet  expired. 

This  Massachusetts  act  of  1837  thus  marked  the  en- 
trance of  the  state  upon  the  field  of  insurance  regulation, 
which  has  developed  into  the  elaborate  state  supervision 
of  to-day. 

HISTORICAL  MEMORANDA.  1817-1841 

Govtrnmental. —  Disputed  Canadian  boundary  questions  growing  out  of  the 
Ghent  Treaty  with  Great  Britain  settled  —  Boundary  questions  with  Spain 
settled  and  we  paid  $5  000,000  for  Florida  —  The  "Monroe  Doctrine"  given  to 
the  world  {1823). 

Economic. —  Development  of  transportation  by  canals,  steamboats  and 
railroads  —  Erie  canal  begun  1S17,  opened  1825  —  Baltimore  &  Ohio  Railroad 
begun  1828  and  completed  15  miles  in  1830,  horse  cars  —  First  locomotive 
built  New  York  1831,  for  the  South  Carolina  Railroad,  six  miles  long  —  In  1835 
there  were  twenty -two  railroads  in  operation,  two  only  west  of  the  Alleghanies, 
not  one  of  them  140  miles  long  —  Threshing  machines  invented  and  used  1826  — 
Steel  tool  manufactories  established  1825  —  Hard-coal  stoves  made  —  Fair- 
banks'scales  invented  —  Morse  invented  the  telegraph  instrument  and  code  — 
Hunt  made  the  first  lock-stitch  sewing  machine  —  First  reaping  machine  made  — 
All  about  1825-1835. 

Peace. —  There  was  no  war  during  the  twenty-five  years  of  this  period. 

Territorial. —  Eight  states  were  admitted  from  181 6  to  1837,  Indiana,  Mis- 
sissippi, Illinois,  Alabama,  Maine  (1820),  Missouri,  Arkansas  (1836),  Michigan 
1837).     No  more  came  in  until  1845. 

Political. —  Era  of  good  feeling  began  —  The  Federal  Party  ceased  to  exist 
and  was  succeeded  by  the  National  Republicans  and  Anti-masonic  parties  — 
The  long  rivalry  between  Jackson  and  Clay  developed  to  bitter  feeling  — '  Strug- 
gle over  the  National  Bank  was  the  beginning  of  the  financial  disturbances  that 
produced  the  panic  of  1837  —  Nullification  excitement  over  tariffs  —  Anti- 
slavery  movement  begins. 

Insurance. —  Extension  of  local  agency  system  of  large  companies  and  en 
of  small  local  companies  —  Wliat  is  now  the  Fire  Patrol  system  was  projected 
1819  —  First  reinsurance  in  the  United  States  recorded  in  1819  when  the  Middle- 
town  Fire  of  Connecticut  retired  —  First  western  department  established  at 
Cincinnati  1825  —  Massachusetts  passed  first  reinsurance  reserve  law  1837  — 
First  steps  taken  towards  standard  rating  of  risks  between  1830-40,  but  very 
little  headway  made  —  Joseph  Ball,  third  president  Insurance  Company  of 
North  America,  died  September  2,  1825 — John  C.  Smith,  fifth  presidents 
elected  to  office  April  5, 1831  .on  the  retirement  of  John  Inskeep,  who  had  served 
since  October  i,  1S06.  Mr.  Inskeep  died  December  18,  1834  —  Robert  S. 
Stephens.  secretar>'  from  February  28,  1806,  to  June  12,  1832,  was  succeeded  as 
secretary  on  June  19  of  that  year  by  Arthur  G.  Coffin. 

I42] 


U,  >*.,  -  4,  M-*^:\,-  •     '--*'  :.  *t***-  .-. 


THE  ERA  OF  GOLD  AND  WARS 

1842-1866 

The  condition  of  peace  and  the  development  of  the 
national  domain  that  had  continued  for  twenty-five  years 
was  immediately  succeeded  by  twenty-five  years  of  great- 
est stress  and  turmoil,  during  which  the  United  States 
fought  a  brief  but  fierce  war  with  Mexico,  narrowly  escaped 
hostilities  with  Russia  over  the  Oregon  country,  and  after 
a  long  and  bitter  internal  political  conflict  over  the  in- 
stitution of  slavery,  was  plunged  into  the  greatest  civil 
war  the  world  had  ever  seen  up  to  that  time.  It  employed 
the  energies  of  the  greatest  armed  forces  ever  brought 
together  in  battles  and  changed  in  many  ways  the  science 
of  war  on  land  and  sea. 

Curiously  enough  this  period  was  ushered  in  by  the 
election  in  1840  of  General  William  Henry  Harrison  ("Old 
Tippecanoe")  as  President,  after  a  most  exciting  campaign, 
that  has  come  down  in  popular  story  as  "The  Log  Cabin 
and  Hard  Cider  Campaign."  Martin  Van  Buren  was  the 
candidate  of  the  Democrats  to  succeed  himself.  The 
Whigs  nominated  Harrison,  the  ideal  of  a  popular  favorite. 
As  governor  of  Indiana  territory  in  1813  he  had  beaten  the 
Indians  under  Tecumseh  at  Tippecanoe  Creek,  and,  as 
commander  of  the  American  forces  in  the  War  of  181 2, 
had  made  a  victorious  campaign  on  land  and  the  lakes. 
It  was  Harrison  who  received  the  famous  message  from 
Commodore  Oliver  Hazard  Perry  after  the  naval  battle  of 
Lake  Erie,  "We  have  met  the  enemy  and  they  are  ours." 

The  effects  of  the  disastrous  panic  of  1837  were  still 
felt  everywhere  and  the  people,  as  usual,  attributing  all 
their  woes  to  the  party  under  which  these  began,  rallied 
to  Harrison.     The  log  cabin  and  the  coon-skin  were  made 

I43] 


Mt 


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EPISODES        OF        HISTORY 

the  popular  badge  of  his  candidacy.  All  over  the  country 
such  cabins  were  erected,  having  a  coon-skin  nailed  to 
the  door  and  a  barrel  of  hard  cider  standing  beside  it. 
Nothing  like  the  popular  excitement  had  before  been  seen. 
In  the  West  and  East  meetings  were  held  at  which  fifty, 
eighty  and  one  hundred  thousand  persons  were  present. 
Weeks  were  spent  preparing  for  them  and  caravans  bore 
partisans  from  long  distances,  bringing  their  own  supplies 
for  those  willing  to  wait  and  listen  to  the  popular  orators 
who  had  assembled  to  intensify  the  enthusiasm.  At  one 
meeting  of  Whigs  at  Dayton,  Ohio,  the  encampment  of 
Harrison's  followers  covered  ten  acres  of  ground.  The 
slogan  was  "Tippecanoe,  and  Tyler  Too,"  John  Tyler  of 
Virginia  being  the  nominee  for  Vice-President. 

Harrison  was  overwhelmingly  victor  in  the  Electoral 
college,  where  he  received  234  votes  to  60  for  Van  Buren, 
although  he  had  a  plurality  of  only  146,315  in  a  total 
popular  vote  of  2,410,000.  Harrison  was  inaugurated 
March  4,  1841,  but  died  April  4th  without  having  ex- 
ercised any  important  function  of  office.  By  his  death 
John  Tyler  became  President,  and  as  he  had  always  been 
a  Democrat,  he  fell  out  with  the  Harrison  cabinet  over 
legislation,  and  all  the  members  resigned,  except  Daniel 
Webster,  who  remained  as  Secretary  of  State  until  he  had 
arranged  the  Canadian  boundary  treaty  with  England  in 
1842,  when  he,  too,  retired. 

It  was  under  Tyler's  administration  that  the  United 
States  was  committed  to  the  annexation  of  Texas,  which 
brought  on  war  with  Mexico  and  resulted  eventually  in 
our  acquirement  also  of  a  new  area  of  more  than  500,000 
square  miles. 

Mexico  had  won  its  independence  from  Spain  in  182 1. 
Texas  was  then  one  of  the  provinces  of  the  colony  of  Mexico 
and  so  became  one  of  its  states.  The  great,  rich  plains  of 
Texas  had  attracted  the  attention  of  Americans  living  in 
the  southwestern  territories,  and  as  soon  as  Mexico  became 

[44] 


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"THE"        NORTH        AMERICA 

an  independent  republic  Moses  Austin,  a  citizen  of  the 
United  States,  asked  the  Mexican  government  for  a  grant 
of  land  and  permission  to  bring  in  settlers.  It  was  after 
Moses  Austin  that  the  capital  of  Texas  is  named.  He 
obtained  the  grant  on  condition  of  bringing  in  three 
hundred  families  to  settle.  Thus  began  a  great  movement 
of  Americans  to  the  Mexican  state  of  Texas.  By  1833 
Mexican  rule  had  become  so  unsatisfactory  to  the  Amer- 
ican colonists  that  they  rebelled  and  by  1836  had  set  up 
the  independent  republic  of  Texas.  It  was  during  this 
war  that  the  massacre  at  the  Alamo  was  committed  by 
Mexicans  under  Santa  Ana,  March  6,  1836.  The  Texan 
garrison,  under  Col.  Travis,  Col.  Bowie  and  the  celebrated 
David  Crockett,  was  besieged,  overpowered  and  killed 
to  the  last  man.  Gen.  Sam  Houston,  another  famous 
Texan,  defeated  the  Mexicans  finally  at  San  Jacinto  and 
Texan  independence  was  acknowledged  by  the  United 
States,  England  and  France. 

That  is  the  story  of  Texan  independence.  The  story 
of  annexation  to  the  United  States  leads  on  to  the  war  of 
the  United  States  with  Mexico,  the  acquisition  of  the  en- 
tire Pacific  Coast  of  the  United  States  (except  Alaska), 
the  discovery  of  the  gold  fields  of  California  and  the  crea- 
tion of  the  United  States  into  the  richest  nation  in  the 
world.  It  involves  politics  and  romance  beyond  the 
dream  of  fiction. 

John  Tyler  began  it  in  1844  as  a  political  move,  whether 
based  on  far-seeing  statesmanship  or  passing  expediency 
has  been  disputed.  Texas  applied  for  admission  as  soon 
as  independence  was  achieved,  but  the  growing  struggle 
over  the  slavery  question  kept  Congress  from  granting 
admission.  Tyler  thought  he  saw  a  way  around  this 
deadlock,  negotiated  a  secret  "treaty  of  annexation"  with 
Texas  and  in  April,  1844,  surprised  the  Senate  by  offering 
it  for  ratification.  Thus  it  became  a  political  issue  through 
Tyler,  who  was  not  acknowledged  by  either  political  party. 

l4Sl 


SCHOOL  OF 

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EPISODES       OF       HISTORY 


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The  Democrats  took  up  the  issue,  made  it  their  own  and 
carried  the  country  in  1844  for  James  K.  Polk.  Texas 
was  admitted  in  1845. 

This  brought  us  to  war  with  Mexico.  For,  in  admit- 
ting Texas,  we  had  her  claims  to  protect.  The  Mexican 
boundary  was  delimited  in  1819  at  the  forty-second 
parallel,  the  present  northern  line  of  California.  Texas 
claimed  for  herself  all  the  land  to  the  source  of  the  Rio 
Grande  in  what  is  now  New  Mexico  and  Colorado  and 
thence  north  to  the  forty-second  parallel.  Mexico  claimed 
that  the  Nueces  River,  and  not  the  Rio  Grande,  was  the 
western  line  of  Texas.  Neither  side  would  retreat,  and 
so  in  1846  General  Zachary  Taylor  was  ordered  to  cross  the 
Nueces  with  troops  and  occupy  the  land  south  to  the  Rio 
Grande.  As  soon  as  he  crossed  the  river  the  Mexicans 
attacked.  Taylor  won  the  battles  of  Palo  Alto  and  Resaca 
de  la  Palma,  and  later  pushed  on  to  Monterey,  where  he 
won  again,  and  then  marched  south  to  meet  an  expedition 
under  General  Winfield  Scott,  that  had  been  landed  at  Vera 
Cruz  to  push  westward  to  the  City  of  Mexico.  Every- 
where the  Americans  were  victorious:  at  Buena  Vista, 
Cerro  Gordo,  Jalapa,  Churubusco  and  Molino  del  Rey, 
and  after  the  storming  of  Chapultepec  they  made  a 
triumphal  entry  into  the  City  of  Mexico  September  14, 
1846. 

The  country  was  filled  with  delight.  In  the  army  were 
leaders  and  young  subalterns  whose  names  were  after- 
ward to  become  widely  known.  General  Taylor  was  to  be 
elected  President,  as  was  Lieutenant  Ulysses  S.  Grant,  while 
General  Scott,  General  Fremont,  Lieutenant  Simon 
Bolivar  Buckner  and  W.  S.  Hancock  were  to  be  leaders 
but  losers  on  Presidential  tickets. 

The  effect  of  the  victory  was  to  leave  the  United  States 
in  possession  of  northwestern  Mexico  up  to  the  northern 
line  of  California.  California  had  promptly  revolted 
from  Mexico  in  June,   1846,   and  declared  herself  in- 

[46] 


(( 


THE"       NORTH       AMERICA 


dependent  as  the  Bear  State  Republic.  Peace  was 
arranged  by  paying  Mexico  $15,000,000  for  the  522,568 
square  miles  thus  added  to  our  domain. 

General  Zachary  Taylor  came  out  of  the  Mexican  War 
a  popular  hero,  was  promptly  nominated  for  President 
by  the  Whigs  and  elected,  defeating  Lewis  Cass  of  Mich- 
igan and  Martin  Van  Buren.  This  year  (1848)  the  Free 
Soil  Party  was  organized  and  took  the  field  against  the 
extension  of  slavery.  It  was  not  until  1854  that  the 
present  Republican  Party  was  organized  at  Ripon, 
Wisconsin,  and  started  its  long  career.  President  Taylor 
lived  only  a  little  more  than  a  year  after  inauguration, 
dying  of  bilious  fever  July,  1850,  but  he  lived  to  see  the 
beginning  of  the  extraordinary  fruits  of  his  victorious  arms 
in  Mexico. 

This  was  the  discovery  of  gold  in  California.  While 
Taylor  and  Scott  had  been  attacking  central  Mexico,  the 
few  Americans  that  had  migrated  to  California,  then  a 
Mexican  state,  revolted  and  General  Fremont  and  Commo- 
dore Stockton  gave  them  the  protection  of  the  army  and 
navy  while  they  organized  an  independent  state,  the 
"Bear  Republic."  Its  flag  bore  the  image  of  a  grizzly 
bear. 

Then  a  year  later  gold  was  found !  It  reads  like  a  fairy 
tale.  One  day  a  man  named  Marshall  was  building  a  mill 
race  on  a  small  stream  for  a  Swiss  immigrant  by  the  name 
of  Sutter,  who  was  constructing  a  grist  mill.  In  the 
midst  of  his  work  Marshall  saw  something  yellow  shining 
in  the  mud.  He  picked  up  a  few  particles  and  wondered 
if  it  were  not  gold.  He  took  some  specimens  and  went  to 
Sutter's  Fort,  the  site  of  the  present  city  of  Sacramento, 
reported  to  Sutter  and  the  two  locked  themselves  in  a  room 
and  tested  the  particles  by  every  process  they  had.  By 
every  one  they  were  demonstrated  to  be  gold.  They  went 
back  to  the  mill  race  to  examine  further.  If  they  had 
been  able  to  keep  their  secret  and  acquire  all  the  land  they 

I47] 


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EPISODES        OF        HISTORY 

wanted,  these  two  men  would  have  been  richer  than  the 
fabled  Croesus,  or  any  monarch  of  the  world.  But  a 
Mormon  day  laborer  employed  on  the  work  saw  their 
excitement  as  they  investigated  the  mud  and  sand,  took 
occasion  to  look  about  for  himself,  and  spread  the  news 
that  virgin  gold  had  been  discovered  at  Sutter's  Mill. 

The  effect  was  indescribable.  Everywhere  as  the 
news  spread  men  closed  their  business  houses  and  left 
their  fields,  sailors  in  the  harbor  of  San  Francisco  deserted 
their  ships,  soldiers  left  their  barracks  —  all  flocking  to  the 
little  American  River  to  get  their  share  in  the  new  El 
Dorado.  News  traveled  slowly  in  those  days  and  the 
farther  it  went  naturally  the  less  belief  there  was  in  the 
astonishing  story,  which  grew  in  marvels  with  every  day's 
journey  it  took.  Not  until  President  Polk  in  1849  laid 
the  facts  before  Congress  in  his  annual  message  was  the 
East  convinced.  Then  began  that  extraordinary  rush  of 
gold  hunters  to  the  West,  that  has  since  been  likened  to 
the  Greek  tradition  of  the  "Search  for  the  Golden  Fleece. ' ' 
Those  who  went  have  since  been  known  as  the  "Argonauts 
of  Forty-Nine. ' '  No  difficulty  or  danger  could  deter  them. 
They  went  straight  west  across  the  trackless  plains,  or  by 
sea  to  Panama  and  across  the  fever-poisoned  jungle  of  the 
Isthmus,  and  then  up  the  west  coast,  or  around  Cape 
Horn.  Bold  and  daring  young  adventurers  with  no  money 
to  travel  with  were  fitted  out  by  less  daring  but  better 
supplied  friends  at  home,  and  thus,  like  chartered  privateers, 
were  sent  out  to  bring  home  and  divide  the  spoils  of  the 
new  territory. 

No  episode  in  the  history  of  the  United  States  is  so 
filled  with  glamour,  excitement,  tragedy,  and  wonderful 
adventure  as  those  succeeding  few  years  in  California, 
when  the  rude,  daring  and  fearless  army  of  the  "Forty- 
Niners"  hunted  for  gold,  made  their  own  laws  and  ex- 
ecuted them  on  the  spot;  when  men  grew  rich  in  a  day  or 
were  impoverished  over  night;  when  some  with  the  genius 

I48I 


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AMERICA 


of  trade  grew  richer  through  providing  supplies  and  selling 
them  at  enormous  profits  than  did  those  who  took  the 
actual  gold  out  of  the  earth.  In  the  next  twenty  years 
more  than  a  billion  dollars'  worth  of  gold  was  to  be  taken 
out  of  California  alone. 

This  was  only  the  beginning.  Ten  years  later,  in 
1858,  gold  was  discovered  near  Pike's  Peak  in  what  was 
then  the  unorganized  Indian  country,  but  is  now  the  state 
of  Colorado.  This  was  in  the  midst  of  a  desert  country, 
without  trees  or  grass,  known  on  the  map  of  those  days 
as  the  "Great  American  Desert." 

But   not   even   this  death-dealing  desert   could   dis- 
courage those  who  were  in  search  of  gold.     Denver  was 
then,  in  1858,  a  village  of  a  few  houses,  where  to-day  it  is  a 
magnificent  city  of  300,000  population.     Later  gold  was 
discovered  in  Utah  and  in  what  is  now  the  state  of  Nevada, 
and   from   every   direction   the  stream  of  gold-hunters 
flowed  in  on  both  slopes  of  the  Rocky  Mountains,  from 
Mexico  to  the  line  of  Canada.     These  mines  had  to  be 
reached  by  invading  the  desert,  but  the  invasion  was  made 
and  another  era  of  glamour  opened,  only  less  wonderful 
than  that  of  California,  and  less  wonderful  only  because 
it  was  the  second  act  of  the  great  drama  of  treasure-trove. 
Those  who  can  recall  the  discovery  of  gold  in  Alaska  twenty 
years  ago,  the  stories  of  adventure  and  the  wonderful 
development  of  that  far-off  strip  of  United  States  territory, 
can  multiply  them  to  appreciate  the  California  episode. 

And  what  happened?  Out  of  the  individual  tragedies, 
sufferings  and  toil  of  those  "Argonauts  of  Forty-Nine" 
and  their  successors  of  1858  and  1859  in  the  Great  Amer- 
ican Desert,  the  flower  of  civilization  sprang  like  a  rose 
from  wilds  that  had  been  occupied  by  savage  Indians  and 
wild  beasts  and  avoided  like  a  pestilence  because  of  its 
lack  of  vegetation.  The  Great  American  Desert  extended 
from  longitude  98°  to  107°  and  from  latitude  33°  in  the 
south  to  43**  in  the  north.    It  covered  much  of  what  are 

[49] 


i  ' 


If 


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) 


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EPISODES        OF        HISTORY 

now  the  fertile  states  of  Kansas,  Nebraska,  Montana, 
Utah  and  the  whole  of  Colorado  and  most  of  New  Mexico. 
Irrigation  and  the  ceaseless  labor  of  men  have  made 
gardens  where  formerly  were  but  sand  and  cactus.  The 
Great  American  Desert  has  long  ago  disappeared  from 
maps,  along  with  the  Llano  Estacado  or  "Great  Staked 
Plains"  of  western  Texas. 

Then  the  people  of  the  United  States  began  to  be  called 
upon  to  pay  for  the  gold,  which  is  according  to  the  old 
immutable  law  that  those  who  dance  shall  pay  the  piper. 
The  payment  was  to  be  made  in  the  lives  of  thousands  of 
the  best  manhood  of  all  the  sections  lost  in  Civil  War.  It 
was  not  yet  in  sight,  but  an  ominous  cloud  of  irrepressible 
difference  was  on  the  horizon  of  politics  and  had  been 
growing  since  the  very  formation  of  the  government. 
This  was  an  intense  political  jealousy  over  the  limitation 
or  extension  of  slavery.  Slavery  existed  in  all  the  thir- 
teen original  states.  Even  white  penal  slaves  had  been 
held.  When  independence  was  achieved  the  five  most 
northerly  states  began  to  abolish  slavery,  the  eight 
southern  ones,  among  which  New  York  and  New  Jersey 
were  numbered,  retained  it.  These  two  gradually 
abolished  it;  and  by  common  consent,  but  with  great  care, 
it  was  agreed  that  the  Ohio  River  and  the  southern  line 
of  Pennsylvania  should  be  the  southern  boundary  of  free 
states  that  might  grow  out  of  the  new  territories  in  the 
West.  This  was  east  of  the  Mississippi,  which  was  as 
far  west  as  was  then  owned  by  the  United  States. 

When,  however,  the  national  domain  was  extended  to 
the  Rocky  Mountains  and  thence  to  the  Pacific,  jealousies 
arose  as  to  the  admission  of  new  states  in  order  to  keep  the 
balance  of  political  power  evenly  adjusted  between  the 
"free"  and  "slave"  states.  No  man  among  all  the  great 
statesmen  produced  by  the  South  and  North  had  possessed 
the  genius  to  solve  that  political  problem,  which  for  forty 
years  had  awakened  suspicion,  distrust  and  hatred  be- 

Iso) 


t( 


THE 


>i 


NORTH       AMERICA 


tween  states  and  individuals.    The  great  bulk  of  im- 
migration from  Europe  was  almost  wholly  to  the  northern 
states  and  these  brought  with  them  more  opposition  to 
slavery  in  any  form.     When  the  Golden  West  was  dis- 
covered and  the  stream  of  migration  was  begun  to  the 
Pacific  Coast,  the  struggle  over  whether  California,  with 
its  fabulous  wealth,  should  be  admitted  as  a  "free"  or 
"slave"  state  was  the  slipping  of  the  stone  that  brought 
down  the  national   house   in   civil   war.     California  was 
admitted  "free"  in  1850  and  then  the  political  struggle 
raged  for  ten  years.     It  looked  even  then  as  if  the  country 
were  to  be  divided  into  two  republics,  differing  only  as  to 
slavery.     Statesmen  who  had  not  the  genius  to  solve  the 
problem  compromised  it  and  thus  postponed  the  con- 
flict.    Henry  Clay, "  the  Pacificator,"  "  the  Peace  Maker," 
did  this  in  1850,  but  when  he  died  two  years  later  there 
was  none  to  take  his  place. 

So  it  was  that  in  i860  when  Abraham  Lincoln  was 
elected  President  the  "irrepressible  conflict"  so  long  de- 
layed began  to  take  form.  States  began  to  secede  from 
the  Union  under  the  doctrine  of  "state's  rights"  and  when 
Lincoln  was  inaugurated  (March  4,  1861)  he  found  him- 
self facing  civil  war  with  the  entire  population  in  a  state 
of  ferment  and  uncertainty.  The  confusion  of  political 
and  private  opinion  was  complete.  In  all  portions  of  the 
country  the  large  body  of  voters  wanted  the  Union  con- 
tinued as  it  had  begun,  but  suspicion  rendered  it  im- 
possible to  arrive  at  agreement,  so  that  when  the  first  gun 
was  fired  in  186 1  it  resulted  in  a  separation  almost  wholly 
along  sectional  lines.  Every  man  stood  with  his  state, 
and  the  state  generally  with  its  section. 

Then  followed  the  long  conflict  during  the  height  of 
which  two  million  men  were  under  arms  on  both  sides. 
In  many  instances  friends,  brothers,  fathers  and  sons 
found  themselves  on  opposing  sides  in  politics  and  in  arms. 
Time  has  not  yet  suflSced  to  allow  the  story  of  that  war  to 

ISi] 


1 


Sii '' 


i  t 


1 1 


it 


r 


EPISODES        OF 


HISTORY 


be  dispassionately  told.  Too  many  deep  personal  feel- 
ings have  been  involved,  too  much  unwritten  history  is 
yet  to  be  discovered.  But,  just  as  the  Civil  War  was  on 
the  greatest  scale  recorded  up  to  that  time,  so  the  results 
of  it  have  been  the  most  remarkable.  Fifty  years  after 
its  close  the  scars  of  it  have  disappeared  from  the  mem- 
ories of  those  whose  fathers  fought  it.  North  and  South 
are  firmly  bound  together  in  devotion  to  the  reunited 
nation.  One  thing  above  all  has  grown  out  of  it,  satis- 
factory alike  to  all  sections,  all  parties  and  every  patriot  — 
the  feeling  that  it  is  one  country  and  not  two,  with  an 
endless  frontier  between  them  marking  the  limits  of 
separated  and  jealous  nations.  The  far-sighted  statesmen 
of  both  sides  feared  such  a  result;  they  dreaded  to  see  the 
North  American  republic  divided  along  fortified  frontiers, 
subject  to  the  same  political  misunderstandings  and 
dangers  of  war  that  have  so  often  shaken  Europe  and 
plunged  humanity  into  sorrow. 

The  Civil  War  had  cost  the  lives  of  about  700,000  men 
who  fell  in  battle,  died  of  wounds  or  perished  of  camp 
diseases.  Of  these  it  is  estimated  that  about  140,000 
fell  in  battle,  nearly  90,000  died  of  wounds  and  the  re- 
mainder of  disease.  Up  to  1879  the  cost  of  the  war  to  the 
government  at  Washington,  in  money,  was  $6,190,000,000. 
So  much  blood  and  treasure  had  never  been  poured  out 
in  four  years  of  war  before.  The  cost  to  the  Confederate 
States  has  never  been  possible  to  estimate,  except  that  by 
the  emancipation  of  slaves  they  lost  upwards  of  $2,000,- 
000,000  of  property  alone,  without  regarding  the  cost  of 
maintaining  their  armies  and  the  pouring  out  of  all  they 
had  on  the  altar  of  their  hopes. 

During  the  period  of  twenty-five  years,  between  these 
episodes  that  stirred  the  nation  to  its  depths,  the  tide  of 
development,  the  creation  of  wealth,  and  the  expansion  of 
the  country  went  on  without  interruption,  but  on  a  smaller 
scale.    The  population  that  was  17,000,000  in  1840  had 

[52] 


THE"        NORTH        AMERICA 


increased  to  31,000,000  in  i860;  and  immigrants  continued 
to  pour  into  the  land  which  was  believed  to  be  teeming 
with  wealth.  Seven  new  western  states  were  created 
and  admitted  into  the  Union.  Five  new  territories  were 
established. 

In  the  cities  gas  and  plumbing  were  introduced; 
streets  were  paved,  instead  of  being  left  as  mere  dirt  roads; 
public  schools  were  opened  and  education  made  free. 
There  was  a  great  expansion  in  railroad  building,  express 
lines  were  opened,  postage  stamps  were  used,  and  ocean 
ships  were  beginning  to  be  driven  wholly  by  steam.  The 
modern  sewing  machine,  the  power  harvester,  the  tele- 
graph, India  rubber,  the  perfection  of  the  daguerreotype 
(forerunner  of  the  photograph,  which  was  in  its  turn  the 
forerunner  of  the  moving  picture)  and  the  Atlantic  cable 
were  all  invented  or  perfected  during  this  period. 

In  1846  the  discovery  of  chloroform  was  made,  which 
gave  foundation  to  the  miracles  of  surgery  that  have  since 
been  performed. 

During  these  years,  so  trying  and  tempestuous  to  the 
whole  country,  the  Insurance  Company  of  North  America 
was  keeping  step  with  the  nation.  Its  marine  business 
had  grown  into  large  proportions  again  with  the  develop- 
ment of  ocean  commerce.  Fascinating  as  marine  under- 
writing was  in  the  early  days,  it  had  its  dangers.  There 
were  no  conflagrations  as  in  fire  insurance,  but  there  were 
the  coming  together  of  numerous  losses  during  times  of  war, 
which  was  quite  as  bad.  As,  for  instance,  during  the 
first  ten  years  of  the  foreign  wars  when  the  company  had 
out  of  six  millions  of  premiums  only  9  per  cent  left  for 
expenses.  So,  during  the  twenty  years  from  1842  to 
1862,  the  marine  premiums  were  $5,957,630,  but  the  losses 
left  only  15  per  cent  of  that  for  expenses. 

Attempts  to  collect  the  French  spoliation  claims  from 
the  government  were  continued  during  this  period.  In 
the  first  session  of  the  Congress  meeting  1846,  a  bill  passed 

(S3] 


I* 


I 


EPISODES        OF        HISTORY 

both  houses  approving  the  claims  and  appropriating 
money  to  pay  them.  It  was  vetoed,  however,  by  President 
Polk,  who  was  then  preparing  for  the  Mexican  War.  In 
January,  1855,  the  same  bill  again  passed  both  houses,  but 
was  vetoed  by  President  Pierce.  The  Civil  War,  of 
course,  served  to  postpone  the  whole  matter  indefinitely. 
There  were  numerous  claimants  besides  the  North  Amer- 
ica. Other  insurance  companies  and  individual  claimants 
were  pressing.  The  two  bills  that  were  passed  carried 
appropriations  of  $5,000,000  to  indemnify  those  whose 
legal  claims  had  been  traded  off  by  the  government  for 
national  purposes. 

The  introduction  of  steam  as  motive  power  for  ships, 
which  began  so  largely  in  1839-40,  was  destined  to  take 
much  of  the  uncertainty  and  hazard  out  of  the  sea.  The 
records  of  the  Insurance  Company  of  North  America,  if 
gone  through  in  detail,  might  furnish  many  a  memorandum 
that  would  lead  to  romances  of  the  sea,  such  as  the  case 
of  the  White  Star  liner  "Naronic,"  that  sailed  from  port 
and  from  that  day  to  this  has  never  been  heard  from,  sup- 
posed to  have  "turned  turtle"  in  some  storm  —  the  mys- 
tery of  passengers,  crew  and  cargo  left  impenetrable  for- 
ever. Or  the  case  of  the  brig  "Marie  Celeste,"  that  was 
found  after  weeks  of  disappearance  sailing  aimlessly  about 
in  the  middle  of  the  Atlantic  ocean.  All  sails  were  set, 
everything  was  in  place,  the  remains  of  a  half-consumed 
breakfast  were  on  the  table;  but  what  had  become  of  the 
crew  has  never  been  known.  Every  man  had  vanished 
as  completely  from  human  ken  as  if  not  one  had  ever 

existed. 

The  largest  number  of  marine  losses  are  prosaic,  how- 
ever, as  are  fire  losses  on  land.  Marine  losses  occur  largely 
through  fire,  collision,  sinking  or  being  overcome  by  the 
elements,  stranding,  damage  to  cargo  from  leakage  caused 
by  carelessness,  or  by  rats  gnawing  some  sea  connection 
and  letting  water  into  the  hold.    A  small  amount  has  been 

[54I 


(( 


THE 


)) 


NORTH       AMERICA 


attributed  to  crime,  such  as  attempts  to  cast  away  vessels 
for  the  insurance.  But  even  this  has  largely  disappeared 
with  the  days  of  wooden  sailing  ships. 

In  fire  insurance  the  Insurance  Company  of  North 
America,  which  had  collected  only  $175,965  in  premiums 
in  the  twenty  years  ending  1842,  collected  $1,692,431 
during  the  twenty  years  ending  1862,  and  was  closely  con- 
nected through  its  local  agents  with  the  every-day  business 
life  and  protection  of  the  people  in  every  part  of  the 
country  that  could  be  readily  reached  by  mail  or  methods 
of  travel. 

That  was  the  period  of  direct  connection  between  the 
local  agency  and  the  company,  out  of  which  sprang  the 
practice  and  the  traditions  of  loyalty  that  were  so  largely 
to  influence  the  future  of  underwriting.  Agents  made  no 
"daily  reports"  then.  The  business  was  reported  in 
monthly  statements  and  in  some  instances  quarterly. 
The  strong  agency  companies  had  but  one  agent  in  a 
vicinity  and  competition  was  beginning  to  be  troublesome 
between  agents  and  local  companies.  The  professional 
aspects  of  the  local  agent  began  to  develop,  as  the  resident 
underwriter  for  his  company.  In  a  number  of  states 
local  companies  were  organizing  to  control  the  local 
markets  for  insurance  both  in  the  fire  and  inland  marine 
branches.  The  enormous  business  carried  on  canal  and 
steamboats  was  inviting  merchants  and  shippers  into 
speculation  without  sufficient  appreciation  of  the  dangers 
involved  in  limited  volume  with  large  lines.  The  policies 
of  the  local  companies  were  as  uncertain  of  security  as  the 
currency  of  state  banks  at  the  time,  and  the  value  of  that 
was  measured  by  decreasing  confidence  as  the  bills  passed 
farther  from  the  point  of  issue.  Competition  between 
"home"  and  "outside"  companies  started  the  enactment 
of  "retaliation"  and  limiting  laws. 

All  this  naturally  increased  the  volume  of  insurance, 
and  multiplied  the  number  of  agents,  increasing  their 

[ssl 


I 


II 


i 


|fc* 


EPISODES       OF       HISTORY 

responsibility.  The  eastern  companies,  owing  to  their 
distance  by  mail  and  travel  from  their  agencies  in  the 
Middle  West  and  the  growing  necessity  of  closer  super- 
vision and  prompt  payment  of  losses,  had  turned  to  the 
establishment  of  departments,  covering  all  the  distant 
states  with  a  resident  general  agent  in  complete  charge. 
One  had  been  established  as  early  as  the  '2o*s  and  had  been 
successful  in  accumulating  large  premium  receipts  and 
establishing  local  influence.  Cincinnati  was  the  favorite 
point  of  location  for  these  departments  because  of  the 
vast  Ohio  and  Mississippi  river  tonnage  and  the  canal 
cargoes  that  originated  there.  In  1864,  however,  the 
Insurance  Company  of  North  America  established  its 
first  western  department  at  Erie,  Pennsylvania.  It  was 
not  until  a  year  later  that  its  New  England  department  was 
established  at  Hartford.  Thus  began  the  creation  of  those 
ganglionic  nerve  centers  of  fire  insurance,  called  variously 
"departments,"  "general  agencies,"  "district  agen- 
cies," all  varying  in  the  size  of  territory  covered,  to  con- 
centrate and  quicken  the  connections  of  the  home  offices 
of  companies  with  the  people  of  every  section  and  state. 

Yet  fire  insurance  was  continuing  to  be  largely  primi- 
tive in  its  methods.  Its  development  was  through  neces- 
sity and  accident  until  after  the  Civil  War,  and  it  did  not 
even  then  immediately  take  on  a  scientific  form.  The 
classification  of  risks  had  grown  out  of  a  question  asked  of 
an  underwriter  by  one  of  his  policy-holders,  who  casually  in- 
quired if  the  company  had  made  any  money  on  paper  mills. 
This  led  to  an  investigation  into  the  lines  of  business  and 
the  experience  of  companies  thus  came  to  be  kept  by 
classes.  Blanks  for  proofs  of  losses  were  not  known 
until  1853.  Policies  were  not  numbered  before  1864. 
Numerous  companies  were  organized,  admitted  and  failed 
in  a  few  months.  Rates  were  made  by  guesses  and  com- 
petition and  only  the  shrewdest  and  most  conservative 
underwriters  could  count  on  success.     It  was  the  good 

IS61 


"THE"        NORTH        AMERICA 

fortune  of  the  North  America  to  have  such  under- 
writers and  pursue  such  a  course,  and  that  is  why  the  first 
company  of  the  United  States  still  survives  with  all  its 
prestige  to  be  among  the  great  companies  of  the  world. 

With  the  development  of  the  West  and  its  great  dis- 
tances beyond  the  AUeghanies  and  to  the  coast,  the 
problems  grew  in  importance.  In  the  early  days  officers 
and  directors  of  each  company  made  trips  and  established 
agencies  and  instructed  agents.  Then  arose  a  necessity 
for  special  representatives.  So  "special  agents"  came 
into  being,  their  work  at  first  being  largely  given  to  ad- 
justing and  paying  losses,  and  then  they  began  to  pay 
attention  to  agencies  and  rate  making. 

There  are  many  agents  now  living  who  saw  the  institu- 
tion of  the  special  agent  expand  into  an  elaborate  system 
of  inspection  and  rate  competition  that  provoked  rate 
wars,  finally  bringing  about  field  organizations  to  correct 
rating  evils.  From  this  arose  the  present  systems  of 
uniform  schedule  rating  which  is  placing  the  business  upon 
a  scientific  actuarial  foundation  with  respect  to  equitable 
rates.  From  these  field  associations  have  grown  also  the 
present  organizations  for  fire  prevention  and  for  the 
betterment  of  agency  practice  everywhere. 


I 


HISTORICAL  MEMORANDA.    1842-1866 

Governmental. —  Boundary  questions  with  Russia  and  Great  Britain  settled 
and  the  present  northern  limit  established  —  Independence  of  Texas  acknowl- 
edged and  Texas  admitted  184s  —  War  with  Mexico  and  conquest  of  Pacific 
Coast  completed  1847,  and  Mexico  allowed  indemnity  of  $15,000,000  —  Gadsden 
Purchase  of  northwest  Texas  made  1853  —  Civil  War  o[>eas  with  Battle  of  Bull 
Run  or  Manassas  Junction  —  Peace  declared  April,  1865  —  Lincoln  assassinated 
April  14,  1865. 

Economic. —  Great  expansion  of  railroads  —  Steamships  begin  to  multiply  — 
Population  nearly  doubles,  cities  founded  and  enlarged  —  Discovery  of  gold  in 
California  opens  continental  avenues  of  wealth  —  Manufactures  begin  to  en- 
large and  inventions  of  value  appear,  the  sewing  machine,  harvester,  India  rub- 
ber, photography,  Atlantic  cable,  chloroform —  Gas,  plumbing,  postage  stamps, 
paved  streets  began  to  be  introduced  and  used. 

War. — War  with  Mexico  January,  1846,  ends. with  capture  of  City  of  Mexico 

[S7l 


»  1 


•I 

I 


EPISODES       OF       HISTORY 

September  14,  1847  —  Civfl  War  —  Battle  of  Bull  Run,  Sunday,  October  21, 
i86x  —  Fort  Donelson  February  i6, 1862  —  Shilob,  April  6, 1862  —  New  Orleans 
April  24, 1862  —  Gettysburg,  July  1-3, 1863  —  Fall  of  Vicksburg,  July  4, 1863  — 
Cbickamauga.  September  ig-3o,  1863  —  Sherman's  March  to  the  Sea,  May- 
December,  1864  —  Wilderness  campaign,  summer  of  1864  —  Siege  of  Rich- 
mond 1864  to  spring  of  1865 — Peace  of  Appomattox  April  9,  1865  —  Both 
armies  disbanded  by  May  31. 

Territorial. —  Texas  and  over  500,000  square  miles  acquired  from  Mexico 
1847  —  Ten  states  admitted,  Florida,  Texas  (1845),  Iowa  (1846),  Wisconsin 
(1848),  California  (1850),  Minnesota  (1858),  Oregon  (1850),  Kansas  (1861),  West 
Virginia  (1863),  Nevada  (1864).  Four  territories  extablished.  New  Mexico, 
Utah,  Washington  and  Nebraska. 

Political. —  Whig  and  Free-Soil  parties  disappear  and  merge  into  the  Re- 
publican Party  in  i860  —  Long  and  bitter  struggle  over  slavery  and  the  con- 
ditions of  new  territories  and  states  —  "Popular  Sovereignty"  experimented 
with  —  Know-Notbing  or  Native  American  Party  appears  and  disappears  — 
Missouri  Compromise  repealed  —  Rise  of  Republican  Party  1856-60, election  of 
Lincoln  —  Seven  states  secede  1861. 

Insurance. —  Great  expansion  of  local  agency  system  and  establishment  of 
general  agencies  or  departments  —  Competition  between  local  and  outside  com- 
panies —  Death  of  John  Corry  Smith,  sixth  president  Insurance  Company  of 
North  America  from  1831,  June  22,  1845,  aged  61.  Succeeded  by  Arthur  Gil- 
more  Coffin,  who  had  been  secretary  since  1832  — Henry  D.  Sherrerd,  elected 
secretary  July  x,  1845,  continued  to  June  i,  1858.  Matthias  Maris,  secretary 
November  3,  1858,  to  April  3,  i860,  when  Charles  Piatt  succeeded  him  —  West- 
em  department  established  at  Erie,  1864  —  New  England  general  agency  estab- 
ished  at  Hartford,  1865. 


IS8] 


RECUPERATION  AND  PROGRESS 

1867-1891 

From  the  throes  of  a  destructive  war  the  United 
States  leaped  almost  at  one  bound  into  the  strongest  period 
of  construction  and  development  in  its  history.  The 
horrors  of  war  changed  into  bitter  political  conflicts,  but 
behind  these  the  energies  of  the  people,  awakened  by  the 
war,  were  unloosed  to  the  opportunities  of  the  future  and 
they  moved  forward  to  achieve  their  destiny. 

We  shall  not  follow  the  political  struggles  of  the  period 
from  1867  to  1 89 1.  The  price  of  war  was  paid  in  pre- 
judices, suspicions,  mistakes  and  experiments,  the  record 
of  which  belongs  to  political  discussion,  not  to  a  story,  like 
this,  of  national  development.  The  assassination  of 
Lincoln,  April  14,  1865, — a  catastrophe  to  the  South  as 
well  as  to  the  North — was  followed  by  the  adminis- 
tration of  Andrew  Johnson,  under  which  the  era  of  "Re- 
construction" in  the  South  began  and  was  to  run  its  pain- 
ful course  for  twelve  years.  Johnson  was  impeached, 
tried  by  the  Senate  and  acquitted  by  one  vote.  The 
"greenback  issue"  came  up  to  confuse  finances,  but  the 
resumption  of  specie  payment,  assured  by  the  passage  of 
preparatory  laws,  was  reached  only  after  the  panic  of 
1873.  This  panic  grew  out  of  unsettled  currency  and 
public  debt  conditions,  in  the  midst  of  which  the  Grangers 
or  farmers'  organizations  of  the  West  and  the  western 
railroads  quarreled  over  freights  and  local  subscriptions  to 
railroad  enterprises.  The  sales  of  bonds  suddenly  ceased, 
in  many  instances  those  already  sold  were  sought  to  be 
repudiated.  All  this  reacted  on  banks,  deposits  began  to 
be  withdrawn,  and  in  1873,  the  storm  burst  with  the  failure 
of  the  great  New  York  banking  firm  of  Jay  Cooke  &  Co. 

[59] 


I 


i'i 


h 


MfF^   * 


EPISODES        OF        HISTORY 

The  tide  of  panic  swept  to  every  town  in  the  country 
where  there  was  a  bank.  During  that  single  year  there 
were  5,000  failures  in  banks,  factories,  commercial  firms 
and  corporations,  succeeded  in  1874  by  5,800  more. 
Nothing  like  it  had  before  been  known  and  the  whole 
country  was  in  gloom.  General  Grant  was  President  and 
was  determined  that  this  sacrifice  of  means  should  not  be 
in  vain,  so  he  insisted  on  moving  toward  specie  payments 
and  declared  that  "the  only  way  to  resume  was  to  re- 
sume." The  laws  passed  in  1874-5  and  later  amended  by 
the  " remonetization  of  silver"  at  "sixteen  to  one"  ac- 
complished the  purpose,  and  on  January  i,  1879,  under 
the  terms  of  the  law,  the  Treasury  began  to  redeem  all  its 
currency  in  gold,  on  demand,  which  ever  since  it  has  done. 
There  was  to  be  no  recurrence  of  the  panic  of  1873  until 
twenty  years  later,  in  1893,  when  another  almost  as  bad 
swept  over  the  country. 

On  July  2, 1881,  James  A.  Garfield,  twentieth  President, 
was  assassinated  four  months  after  inauguration,  by  a 
madman.  He  died  after  much  suffering  September  19. 
This  second  assassination  of  a  President  called  attention 
to  the  fact  that  if  the  Vice-President  should  die  or  become 
unable  to  serve,  there  was  no  provision  for  the  succession 
before  election.  Congress,  therefore,  at  once  passed  the 
act  necessary. 

The  presidential  succession  is  fixed  by  chapter  4  of 
the  acts  of  the  Forty-ninth  Congress,  first  session.  In 
case  of  the  removal,  death,  resignation,  or  inability  of  both 
the  President  and  Vice-President,  then  the  Secretary  of 
State  shall  act  as  President  until  the  disability  of  the 
President  or  Vice-President  is  removed  or  a  President  is 
elected.  If  there  be  no  Secretary  of  State,  then  the  Sec- 
retary of  the  Treasury  shall  act;  and  the  remainder  of  the 
order  of  succession  is  as  follows:  The  Secretary  of  War, 
Attorney-General,  Postmaster-General,  Secretary  of  the 
Navy,  and  Secretary  of  the  Interior.     The  acting  President 

I60I 


♦'THE"        NORTH        AMERICA 

must,  upon  taking  ofiice,  convene  Congress,  if  not  at  the 
time  in  session,  in  extraordinary  session,  giving  twenty 
days'  notice.  This  act  applies  only  to  such  Cabinet  officers 
as  shall  have  been  confirmed  by  the  Senate  and  are  eligible 
under  the  Constitution  to  the  Presidency. 

Despite  the  political  and  financial  bitterness  of  the 
years  from  1866  to  1880  the  longings  of  the  people  for 
homes,  comfort  and  prosperity  were  inspiring  them  to 
development.  In  the  South  the  pressing  problem  was  its 
own  restoration;  in  the  North  eyes  were  turned  to  the  West 
where  the  gold  and  silver  mines  and  vast  pasturages  were 
beckoning  all  who  wanted  to  be  rich.  A  great  tide  of 
migration  began  westward  and  an  endless  stream  of 
immigration  from  Europe  set  in. 

The  population  of  the  whole  country,  which  was  31,- 
000,000  in  i860,  was  50,000,000  in  1880  and  63,000,000 
in  1890,  an  increase  that  made  labor  abundant  and  gave 
markets  for  every  sort  of  production,  so  that  the  wonder- 
ful economic  spectacle  was  presented  of  a  great  and  growing 
nation  becoming  rich  within  itself  by  its  own  efforts; 
asking  little  of  other  nations  except  the  manhood  and 
womanhood  that  flocked  here  to  grasp  opportunities. 
The  true  valuation  of  the  real  and  personal  property  of  the 
United  States  which  was  $7,365,000,000  ($307  per  capita) 
in  1850,  had  grown  to  $42,642,000,000  in  1880,  or  $850  per 
capita.  It  may  be  said  in  passing  that  even  this  vast  sum 
was  increased  to  $88,517,000,000  in  1900,  or  $1,200  per 
capita.     No  other  large  nation  of  the  world  was  so  rich. 

The  problem  of  development  in  the  South  was  delayed 
by  two  causes  —  one  the  unsettled  political  conditions  due 
to  "carpet-bag"  government  and  the  resistance  of  the 
Southern  people  to  exploitation  by  military  force  and 
strangers;  the  second  the  condition  of  labor  following  the 
abolishment  of  slavery.  Before  i860  white  immigrants 
from  Europe  would  not  go  to  the  Southern  States  and 
compete  with  slave  labor.     After  the  war  the  same  dis- 

[6x1 


i 


l»-l 


s 


EPISODES        OF        HISTORY 

inclination  to  match  against  ex-slaves  continued.  So  that 
the  Southern  States  faced  two  acute  problems,  one  to  get 
control  of  their  own  internal  political  affairs,  the  other  to 
fashion  out  of  their  former  slaves  a  body  of  free  labor  and 
make  it  economically  valuable.  The  prejudices  growing 
out  of  the  war  made  these  problems  all  the  more  difficult 
to  solve,  but  the  election  of  1876,  which  for  a  few  months 
seemed  to  threaten  war  again  (the  Hayes-Tilden  campaign 
and  dead-lock)  saw  an  end  to  carpet-bag  government  and 
then  the  New  South,  master  of  its  own  destinies,  took 
hold  of  its  own  fortunes  with  a  will. 

From  the  first  settlement  of  the  country,  the  slave 
states  had  been  devoted  to  agriculture.  There  were  prac- 
tically no  manufactures.  There  were  few  cities.  The 
largest  of  these  were  Baltimore,  New  Orleans,  Charleston, 
Louisville  and  St.  Louis,  and  they  were  merely  distributing 
points  with  no  manufactures  of  consequence.  Sugar  was 
made  in  Louisiana,  but  all  the  cotton  and  tobacco  was 
shipped  to  the  North  or  abroad  —  raw  material,  to  be 
worked  up  and  purchased  back  in  manufactured  forms. 
The  South  was  until  1861  a  royal  purchaser  of  the  manu- 
factures of  the  world,  paid  for  in  the  values  of  its  great 
staple  crops.  Under  these  conditions  there  grew  up  in 
that  section  a  civilization  of  agrarian  wealth,  social  culture 
and  distinction  of  manners  that  produced  some  of  the 
greatest  statesmen,  merchants,  soldiers,  lawyers  and  public 
leaders  of  the  country. 

During  the  war,  when  every  Southern  port  was  block- 
aded, and  no  supplies  were  allowed  to  enter  (1504  vessels 
trying  to  "run  the  blockade"  were  captured  or  destroyed), 
and  when  it  became  apparent  that  slavery  must  pass  away, 
the  Southern  people  were  compelled  to  turn  their  attention 
to  manufactures  for  their  own  necessities.  What  was 
produced  was  crude  enough,  but  the  possibilities  of 
manufactures  were  made  apparent.  Now,  as  soon  as  the 
"reconstruction"  pressure  ceased  in  1876-85,  the  South 

[62I 


ti 


THE 


if 


NORTH       AMERICA 


sprang  at  once  to  both  agricultural  and  industrial  activity. 
Natural  resources  that  had  never  before  been  considered 
were  examined  and  developed.  Some  of  the  largest  and 
richest  deposits  of  iron  ore  in  the  world  were  discovered  in 
Alabama,  and  in  Virginia,  Kentucky,  Tennessee,  North 
Carolina  and  Alabama  vast  fields  of  coal  were  opened. 
Alabama  had  the  iron  ore  and  coal  so  close  together,  with 
all  the  materials  for  iron  making,  that  Birmingham  was 
soon  to  become  the  arbiter  of  iron  prices  of  the  country 
and  now  has  its  influence  on  the  world.  Factories  to 
produce  cotton,  tobacco  and  mechanical  goods  began 
slowly  to  appear,  growing  with  increased  rapidity  every 
year. 

With  these  innovations  agriculture  continued  to  be  the 
chief  reliance.  Where  in  i860,  4,670,000  bales  of  cotton 
were  grown,  6,600,000  were  grown  in  1880  —  from  12,000,- 
000  to  13,000,000  bales  now.  The  United  States  is  the 
largest  producer  of  tobacco  in  the  world  and  the  Southern 
states  produce  four-fifths  of  all  the  tobacco  grown  in  this 
country.  The  value  of  the  Southern  crop  now  is  more 
than  a  hundred  millions  annually.  There  has  been  also 
a  wonderful  development  of  grain  crops  for  home  use  in 
the  South.  Yet,  with  all  this,  great  industrial  centers  of 
manufactures  have  sprung  up  at  Birmingham,  Chat- 
tanooga, Atlanta,  Louisville,  Memphis,  Richmond,  and 
in  many  smaller  towns  in  Georgia,  Alabama,  North  Caro- 
lina, Kentucky,  Virginia  and  West  Virginia.  Since  1885 
an  industrial  empire  has  been  created  in  the  South  alone 
greater  than  existed  in  the  whole  nation,  perhaps,  in  i860; 
and  yet  its  agricultural  production  has  wonderfully  in- 
creased. 

Meanwhile  the  opening  of  the  West  between  the 
Mississippi  River  and  California  was  no  less  wonderful. 
During  the  Civil  War,  Congress  had  chartered  the  Union 
Pacific  and  the  Central  Pacific  railroad  companies  to 
build  jointly  a  line  from  Omaha,  Nebraska,  to  Sacramento 

I63I 


i    1I 


J 


i 


\ 

H 


\n 


EPISODES        OF        HISTORY 


City  in  California  and  thus  connect  the  East  and  West 
wings  of  the  country,  separated  by  the  trackless  prairies, 
alkali  deserts  and  Rocky  Mountains.  It  had  been  the 
policy  of  Congress  since  1827  to  make  grants  of  public 
lands  to  railroads  that  would  extend  into  unoccupied 
sections  and  thus  attract  population.  It  is  estimated 
that  between  1827  and  i860  Congress  gave  away  enough 
land  in  these  grants  to  make  seven  states  the  size  of 
Pennsylvania  and  only  6,000  acres  less  than  the  total  area 
of  the  thirteen  original  states  of  the  Union. 

The  Union  Pacific  Railroad  was  opened  in  1869. 
There  was  instantly  repeated  for  the  country  along  the 
way  the  miracle  that  the  discovery  of  gold  had  performed 
for  California  and  Colorado.  By  1870  more  than  a 
million  people  had  settled  along  the  line  of  the  Union 
Pacific.  Gold,  silver  and  copper  were  discovered  in  what 
are  now  the  states  of  Colorado,  Arizona,  Nevada,  Utah 
and  Montana.  The  building  of  the  Northern  Pacific 
began  in  1870  with  the  completion  of  the  more  southern 
route  and  the  great  lumber,  grazing  and  grain  possibilities 
of  the  Northwest  were  uncovered.  This  was  to  create 
the  great  cities  of  Duluth,  St.  Paul,  Minneapolis,  Seattle, 
Spokane  and  Portland. 

The  rush  of  people  into  the  New  West  was  astonishing. 
In  what  are  the  eleven  states  of  Colorado,  North  Dakota, 
South  Dakota,  Idaho,  Kansas,  Minnesota,  Montana, 
Nebraska,  Nevada,  Oregon  and  Wyoming,  there  was  a 
population  of  only  405,000  counted  in  i860.  Several  of 
them  had  not  a  single  white  person.  In  1890  they  had  a 
population  of  5,429,000  by  the  census.  This  was  more 
population  than  the  United  States  possessed  in  1800  after 
one  hundred  and  fifty  years  of  colonization.  The  New 
West  had  turned  the  larger  trick  in  thirty  years.  In  1910 
those  states  had  nearly  9,000,000  and  have  a  present  esti- 
mated population  of  10,500,000. 

All  the  migrations  of  history  pale  before  this  human 

I64I 


,ii 


"THE"        NORTH        AMERICA 


stream  that  peopled  the  West.  At  present  more  than  one- 
third  of  the  people  of  the  United  States  live  west  of  the 
Mississippi,  which  before  i860  was  practically  unoccupied. 
It  is  a  number  larger  than  the  whole  population  when  the 
Civil  War  began  —  about  32,000,000. 

While  these  things  were  happening  in  the  South  and 
West,  the  progress  in  the  older  states  east  of  the  Mis- 
sissippi and  on  the  eastern  coast  was  equally  astonishing. 
It  seemed  as  if  all  the  wonders  of  creation  of  material 
wealth,  comfort,  luxury  and  mechanical  convenience  in 
history  were  to  be  overwhelmed  by  the  invention  and  in- 
troduction of  new  processes  and  the  production  of  new 
means  of  communication  and  transportation  and  in  labor- 
saving  arts. 

There  are  many  persons  still  living  who  saw  no  better 
lights  than  candles  before  they  were  grown  men  and 
women.  Viewed  from  every  standpoint  of  material  prog- 
ress the  times  before  i860  can  fairly  be  described  as 
"candle-light  times."  The  first  well  for  taking  petroleum 
oil  out  of  the  earth  was  drilled  in  1859  at  Titusville,  Penn- 
sylvania, by  a  man  named  Drake.  He  found  oil,  but  it 
was  produced  in  small  quantity.  Only  two  hundred 
barrels  were  obtained  from  all  the  wells  in  existence  in  i860. 
Its  first  value  was  in  its  illuminating  qualities.  Refining 
it  for  use  in  lamps  called  out  the  invention  of  what  was 
called  the  "coal-oil"  lamp,  that  was  to  be  used  in  millions 
of  homes  where  there  was  no  gas  and  where  candles  no 
longer  sufficed.  So  far  as  the  comforts  of  home  were  con- 
cerned the  "coal-oil"  lamp  probably  made  a  greater  im- 
pression of  satisfaction  than  any  invention  of  the  century. 
From  the  10,000  gallons  of  petroleum  produced  in  i860 
there  was  a  rapid  increase  to  over  2,000,000,000  gallons  in 
1880  (12,000,000,000  at  present).  From  its  restricted  use 
in  lamps  for  lighting  purposes  it  was  coming  to  be  used 
as  fuel  for  all  sorts  of  purposes. 

During  this  period  began  also  the  great  development  of 

[65I 


-(4 


* 


; 


EPISODES 


O   F 


HISTORY 


electricity.  The  second  Atlantic  cable  was  laid  in  1886, 
but  the  electric  current  was  as  yet  used  alone  for  teleg- 
raphy. Then  Brush  invented  the  arc  light  and  the 
dynamo,  and  electric  lighting  and  electric  motors  followed. 
Electricity  began  to  be  used  for  searchlights,  photography, 
street  and  house  lighting,  telephoning,  welding  metals, 
electroplating,  electric  railways  and  innumerable  other 
power  purposes.  Toward  the  close  of  the  era  came  the 
perfected  bicycle,  the  gas  engine,  the  trolley  cars,  pas- 
senger elevators,  enameling  of  kitchen  and  sanitary  uten- 
sils, the  phonograph,  the  moving  picture  machine,  vesti- 
buled  railway  trains,  the  perfected  typewriter,  the  cash 
register,  and  many  other  astonishing  inventions  or  dis- 
coveries entering  into  the  daily  life  of  all  the  people. 

Curiously  enough  some  of  the  most  important  of  these 
inventions  were  looked  upon  in  their  first  stages  as  mere 
toys  or  luxuries.  It  was  reserved  for  the  future  to  develop 
their  enormous  economic  value  and  their  influence  in 
changing  the  methods  of  life  of  the  entire  country.  But 
some  of  them  were  obviously  so  useful  and  universally 
desired  that  the  need  of  large  corporations  to  develop 
them  was  even  then  felt.  Mechanical  progress  in  rail- 
roading, telegraphing,  and  oil  production  and  distribution 
quickly  brought  about  combinations  of  small  corporations 
into  large  ones.  Hundreds  of  short  railroads  were  com- 
bined into  continuous  trunk  lines.  There  were  forty 
telegraph  companies  that  were  combined  into  the  Western 
Union,  and  hundreds  of  oil  producers  were  merged  into  the 
Standard  Oil  Company.  There  was  an  unprecedented 
rush  of  speculation  in  mines,  lands,  stocks  and  bonds  — 
in  everything,  in  fact,  to  which  the  new  inventions  and 
discoveries  seemed  to  lend  increased  values  for  the  future. 
Vast  sums  were  needed  for  the  operations  of  the  great 
corporations,  or  "trusts,"  as  they  began  to  be  called,  and 
for  the  countless  small  corporations  that  were  coming 
into  existence  to  exploit  new  inventions. 

[66] 


(( 


THE 


>> 


NORTH        AMERICA 


Instantly  there  sprang  into  existence  the  beginnings  of 
the  present  system  of  banking  exchanges,  credits  and 
clearances,  by  which  the  general  business  of  the  country  is 
carried  on  with  the  use  and  transference  of  the  very  small- 
est percentage  of  actual  money. 

Fire  insurance  expanded  at  once  under  the  stimulation 
to  support  this  universal  system  of  credit,  as  indeed  did 
all  other  forms  of  insurance.  Coincidentally  with  fire 
insurance  the  present  great  life  insurance  companies  were 
beginning  to  grow.  A  number  of  mutual  life  companies 
had  been  organized  in  the  New  England  and  Middle  States 
from  1842  to  i860,  and  while  their  progress  was  slow  it  was 
sound.  This  encouraged  others  in  the  West  and  East, 
and  even  during  the  Civil  War  several  companies,  now 
grown  to  great  size,  began  business.  The  development 
of  the  best  of  these  companies  was  surprising  during  the 
twenty-five  years  ending  in  1893.  The  business  generally 
increased  many  fold  and  thus  these  companies  were  pre- 
pared also  to  furnish  through  their  policies  the  basis  of 
protection  and  credit  to  individuals. 

During  the  decade  of  the  Civil  War  the  principal 
fire  insurance  companies  operating  through  agencies  and 
writing  about  ninety  per  cent  of  all  the  business,  collected 
aggregate  average  annual  net  premiums  of  about  thirty 
millions.  During  the  decade  of  the  '70's  these  annual 
premiums  increased  to  about  $54,000,000;  to  $83,000,000 
in  the  '8o's,  and  to  $123,000,000  in  the  '90's. 

In  1893,  after  the  close  of  the  One  Hundredth  Year  of 
the  Insurance  Company  of  North  America,  the  net 
premiums  received  by  258  companies  aggregated  $135,- 
000,000,  an  average  of  $520,000  per  company.  In  that 
year  the  premium  receipts  of  the  North  America  were 
$5,672,565,  of  which  $3,743,954  was  in  the  fire  branch 
alone.  This  was  nearly  twice  as  much  received  for  fire 
insurance  premiums  in  one  year  as  the  company  had  re- 
ceived in  the  combined  sixty-nine  years  from  1793  to  1S62. 

I67] 


I  1 


i 


ir 


:       I 


1  I       I 


EPISODES        OF        HISTORY 

This  strong  and  rapid  growth  of  the  company  that  had 
practically  been  born  with  the  government  itself  can  be 
traced  not  only  to  the  resolute  enterprise  with  which  it 
had  followed  the  expansion  of  the  government  and  the 
development  of  the  states  and  sections,  but  to  the  prompt- 
ness and  integrity  with  which  losses  were  paid  and  all 
obligations  met.  It  had  pushed  into  the  West  and  new 
Southwest  with  their  opening,  but  during  the  Civil  War 
all  business  operations  of  Northern  corporations  with  the 
Confederate  States  were  forbidden  by  law  on  both  sides. 
As  soon  as  peace  was  declared,  however,  the  North  Amer- 
ica was  again  in  the  whole  South  reappointing  agents  and 
renewing  business  associations  with  former  patrons  and 
seeking  new.  At  Atlanta  a  Southern  department  was 
established  in  1875  and  in  the  same  year  its  agents  on  the 
Pacific  Coast  were  brought  into  quicker  connection  with 
the  company  through  the  general  agency  established  at 
San  Francisco.  These  enlargements  gave  the  company 
a  local  habitation  and  name  in  every  section  of  the 
country. 

It  was  during  this  period  that  the  firm  security  of 
the  North  America's  policies  was  demonstrated  upon  a 
great  scale,  amid  the  stress  and  storm  of  fire  insurance,  as 
it  had  been  in  marine  insurance  during  the  stormy  periods 
of  war  embargoes  and  destruction  on  the  seas  in  the  perilous 
times  succeeding  the  Revolution.  In  187 1  the  Chicago 
conflagration  with  losses  of  $167,000,000  caused  the 
failure  of  many  insurance  companies  unable  to  meet  their 
losses.  The  North  America's  losses  in  that  fire  were 
$624,000  which  were  promptly  paid.  In  the  very  next 
year  it  was  called  on  to  pay  $989,000  losses  by  the  great 
Boston  fire  and  every  claim  was  again  made  good. 

While  the  Chicago  and  Boston  fires  were  a  staggering 
blow  to  the  energies  of  the  country,  the  result  was  a 
profound  lesson  to  the  economics  of  fire  insurance.  The 
failure  of  many  small  companies  and  the  necessity  for 

[68] 


it 


THE 


tf 


NORTH       AMERICA 


large  companies  to  call  upon  their  stockholders  for  new 
funds  made  apparent  instantly  and  for  aU  time  two  prime 
requisites  for  safety:  One,  the  accumulation  of  large 
net  surpluses  to  absorb  the  shock  of  excessive  losses; 
the  other,  the  restriction  of  lines  in  cities  and  blocks  so 
that  the  distribution  of  liability  would  limit  the  com- 
pany's losses  in  conflagrations  and  protect  the  policy- 
holder against  the  possible  destruction  of  the  security  of 
his  policy.  So  that,  following  these  great  losses,  all 
underwriting  energy  was  turned  to  preparing  the  bulwark 
of  accumulated  and  carefully  maintained  net  surplus 
funds  to  offset  possible  conflagration  dangers  of  the  future. 

The  immediate  effect  of  these  conflagrations  was  to 
sweep  away  a  number  of  companies,  to  increase  very 
largely  the  dependence  of  property  owners  upon  sound 
fire  insurance  and  to  impress  upon  bankers  the  importance 
of  having  all  burnable  property  on  which  credit  for  loans 
was  based,  protected  by  insurance  companies  with  ample 
resources,  under  sound  management.  The  impulse  given 
to  the  fire  insurance  business  was  so  great  that  premiums 
increased  largely  after  1872.  The  North  America's 
prestige  was  so  firmly  established  that  its  fire  premiums 
doubled  in  the  next  ten  years,  leaping  from  $8,000,000  to 
more  than  $15,000,000. 

At  the  close  of  business  on  December  31,  1892,  the  end 
of  the  first  one  hundred  years  of  the  company's  existence, 
it  had  received  premiums  since  organization  amounting 
to  $104,180,328.  At  the  same  time  it  possessed  cash 
assets  of  $9,434,334,  of  which  $3,000,000  was  its  own  cap- 
ital and  $1,601,276  was  net  surplus.  The  unearned  pre- 
miums held  were  $3,073,284.  It  held  $771,621  reclaim- 
able  on  perpetual  policies  outstanding. 

In  that  year  its  total  income  was  $6,081,587,  and  its 
total  expenditures  $6,368,908,  leaving  a  deficit  of  about 
$287,000  on  the  year  due  to  heavy  marine  losses.  But 
the  century  was  rounded  out  with  a  record  of  great  sub- 

[69] 


^1 


F 


1. 


li  '* 
I 


I    ^ 


'•I      i 


EPISODES       OF        HISTORY 

stantial  growth  and  the  honorable  prestige  of  paying  its 
losses  in  good  and  bad  years  alike. 

HISTORICAL  MEMORANDA,  1867-1891 

Governmental. —  Monroe  Doctrine  invoked  and  Napoleon  III  notified  to 
withdraw  French  troops  from  Mexico  —  "Reconstruction"  of  seceded  states" 
begun  i866  and  ended  1877  —  Impeachment  of  President  Johnson  1867  — Re- 
funding of  national  debt  begun  (i86q)  by  providing  that  "5-20"  bonds  be  paid 
"in  coin" — "Alabama"  claims  arbitrated  with  Great  Rritain  1872 — Oregon 
border  dispute  with  England  settled  1872  —  Coinage  of  silver  stopped  in  1873  — 
Greenbacks  made  redeemable  in  specie  1875  —  Silver  "remonetized"  1878  and 
made  legal  tender,  with  a  limit  to  the  coinage. 

Economic. —  Expansion  of  railroads  continued  —  Union  Pacific  and  Central 
Pacific  completed  and  opened  1869  —  Dynamite  and  barbed  wire  fences  in- 
troduced —  Cable  and  electric  cars  invented  —  Petroleum  oil  comes  into  use  — 
Phonograph  and  telephone  invented  —  Bicycles  came  into  universal  use. 

Territorial. —  Thirty-four  states  in  the  Union  1861,  reduced  to  twenty-four 
by  ten  seceding  for  the  Civil  War  —  Total  number  of  states  increased  again  by 
readmission  of  seceding  states  and  creation  of  ten  new  states,  West  Virginia 
(1863),  Nevada  (1864),  Nebraska  (1867),  Colorado  (1876),  North  Dakota,  South 
Dakota,  Montana,  Washington  (1889),  Idaho  and  Wyoming  (1890),  making 
forty-four  states  —  Alaska  purchased  from  Russia  1867,  adding  590,000  square 
miles  to  national  domain  —  Total  territorial  area  1867,  3,517,673  square  miles. 

Political. —  President  Johnson  impeached  for  "high  crimes  and  misde- 
meanors" 1867;  Senate  finds  him  not  guilty  by  majority  of  one  vote  —  General 
U.  S.  Grant  elected  President  1868,  re-elected  1872  —  Congress  erects  "Electoral 
Commission"  1876  to  decide  contest  for  count  of  electoral  votes  for  the  Presi- 
dency —  Rutherford  B.  Hayes  declared  elected  over  Samuel  J.  Tilden  by  185  to 
184  —  Thirteenth,  Fourteenth,  and  Fifteenth  Amendments  to  the  Constitution 
adopted  in  order  named  in  1865,  1868  and  1870  —  James  A.  Garfield  elected 
President  18S0,  assassinated  July  2,  1881,  and  Vice-President  Chester  A.  Arthur 
succeeded  —  Grover  Cleveland  elected  President  1884  —  Benjamin  Harrison 
elected  President  1888  —  Cleveland  elected  President  again  1892. 

Insurance. —  Great  growth  of  fire  insurance  —  Great  Chicago  conflagration 
begins  October  9.  1871,  bums  three  days,  losses  $167,000,000  —  Many  fire 
insurance  companies  fail  as  a  result  —  Great  fire  in  Boston  November  9,  1872. 
losses  $70,000,000;  more  companies  fail  and  a  number  had  to  call  on  stockholders 
for  increased  contribution  —  Questions  of  reserves  and  rates  grow  pressing  — 
Schedule  rating  in  fire  insurance  has  its  start  on  a  scientific  basis  during  thii 
period  —  Charles  Piatt,  who  had  been  secretary,  elected  vice-president  In- 
surance Company  of  North  America,  January  13,  1869,  and  continued  in  that 
office  until  January  14,  1878,  when  he  was  elected  president  to  succeed  .\rthur 
G.  CoflSn.  Mr.  Coffin  died  July  29. 1881,  age  90.  Matthias  Maris,  who  had  been 
secretary  prior  to  Mr.  Piatt's  imcumbency  again  took  that  oflice  continuing  for 
two  years,  when  he  was  succeeded  January  12,  1881  by  Greville  E.  Fryer.  T. 
Charlton  Henry  elected  vice-president  November  a,  1880,  died  August  31,  iSgo. 

[70I 


INTO  THE  TWENTIETH  CENTURY 

1892-1916 

In  the  first  ten  years  of  the  twenty-five-year  period 
extending  from  1892  to  the  present  day,  the  United  States 
was  to  take  its  place  conspicuously  as  one  of  the  first  of  the 
world  powers  in  all  international  questions.  The  first 
step  was  taken  by  President  Cleveland  in  1895  and  the 
second  by  President  McKinley  in  1898.  It  must  be 
satisfactory  to  every  American,  whatever  his  partisan 
politics  may  be,  to  reflect  that  in  the  great  questions  con- 
cerning national  honor  and  responsibility,  these  executive 
leaders  of  both  dominant  parties  represented  the  united 
body  of  public  opinion  that  stood  solidly  behind  them. 
There  is  no  politics  in  national  patriotism. 

The  firm  reiteration  to  France  of  the  Monroe  Doctrine 
as  settled  national  policy  had  caused  that  government  to 
withdraw  in  1867  the  foreign  army  that  Napoleon  III 
sent  to  Mexico  to  establish  an  empire  under  Maximilian. 
When  the  message  was  sent,  there  were  50,000  American 
troops  assembled  on  the  Rio  Grande  under  General  Philip 
Sheridan  ready  to  enforce  our  demands.  In  1895  a 
dispute  of  long  standing  between  Great  Britain  and 
Venezuela,  over  the  boundary  between  the  latter  country 
and  British  Guiana,  came  to  an  acute  stage,  during  which 
Great  Britain  was  apparently  preparing  to  use  force. 
President  Cleveland  suggested  arbitration,  which  was  de- 
clined by  Great  Britain.  The  United  States  replied  by 
restating  the  Monroe  Doctrine.  Great  Britain  retorted 
that  the  Monroe  Doctrine  was  "inapplicable  to  the  state 
of  things  in  which  we  live  at  the  present  day."  Then  it 
was  that  the  President  declared  to  Congress  and  to  Great 
Britain  that  it  would  be  the  duty  of  the  United  States 

[71I 


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W  I 


m 


iMiN 


EPISODES        OF        HISTORY 

"to  resist  by  every  means  in  its  power"  the  appropriation 
by  Great  Britain  of  any  lands  or  the  exercise  of  any  juris- 
diction over  any  territory  that  a  commission  appointed 
by  Congress  should  decide  belonged  to  Venezuela,  This 
meant  war  in  the  event  Great  Britain  should  persist. 
The  announcement  startled  all  Europe  and  for  a  short 
time  there  was  great  excitement  here  and  in  England. 
But  it  subsided  when  the  British  government  expressed  a 
willingness  to  arbitrate.  The  dispute  was  finally  settled 
by  friendly  arbitration. 

The  war  with  Spain  for  the  liberation  of  Cuba  began 
and  was  quickly  ended  in  1898,  but  the  achievements  of 
the  American  navy  and  the  results  of  our  army  operations 
in  Cuba  and  Porto  Rico  were  so  conclusive  and  brilliant 
that  with  the  naval  battles  of  Manila  Bay  and  Santiago, 
and  the  capture  of  San  Juan  Hill  in  Cuba,  the  United 
States  at  once  demonstrated  the  power  of  her  arms  and 
acquired  possession  of  island  territories  so  extensive  and 
strategically  so  important  as  to  give  us  political  interests 
of  the  greatest  consequence  in  Asia  and  vast  responsibil- 
ities in  the  Caribbean  Sea  affecting  all  Europe. 

The  war,  which  was  precipitated  by  the  blowing  up  of 
the  United  States  battleship  "Maine"  in  Havana  harbor, 
during  the  night  of  February  15,  1898,  was  begun  April  21, 
was  half  won  by  Dewey's  destruction  of  the  Spanish 
squadron  in  Manila  Bay  May  i,  and  was  completed  by  the 
storming  of  San  Juan  Hill  July  i  and  the  total  destruction 
of  Cervera's  fleet,  off  Santiago  Bay  on  July  3.  On 
July  14  the  Spaniards  in  Cuba  surrendered  and  peace  was 
agreed  upon  August  12,  after  less  than  four  months  of 
action. 

We  had  as  a  result  assured  Cuba  of  her  independence, 
acquired  the  Philippine  Islands  in  the  South  Pacific,  the 
Island  of  Guam,  half-way  from  Manila  to  Hawaii,  had 
annexed  Hawaii  in  answer  to  the  desire  of  its  people, 
acquired  Porto  Rico  and  the  small  islands  of  Spain  there- 

[72I 


it 


THE 


it 


NORTH       AMERICA 


abouts.  This  gave  the  United  States  new  insular  ter- 
ritory of  about  125,000  square  miles,  a  domain  only 
slightly  smaller  than  the  combined  states  of  New  York, 
Pennsylvania  and  Ohio,  or  about  half  the  extent  of  Texas. 

Two  years  after  the  war  President  McKinley  was  re- 
elected, and  then  came  the  shock  of  his  assassination  by 
an  anarchist  at  Buffalo  Sept.  6,  1901,  when  he  was  hold- 
ing a  reception  at  the  exposition.  His  death  called  the 
Vice-President,  Theodore  Roosevelt,  to  the  Presidency, 
and  under  his  resolute  leadership  the  Panama  Canal  Zone 
was  in  1904  secured  in  perpetual  lease  to  the  United  States 
for  the  building  of  the  Panama  Canal.  The  price  paid 
was  $10,000,000  and  an  annual  rental  of  $250,000  payable 
to  the  Republic  of  Panama. 

The  Panama  Canal  has  cost  about  $350,000,000  and 
was  opened  to  navigation  in  1914,  though  there  have  been 
interruptions  to  its  use  by  slides  in  the  cut.  The  changes 
it  is  expected  to  make  in  the  commerce  of  the  world  are 
momentous,  although  the  breaking  out  of  the  European 
War  in  19 14  has  thus  far  operated  to  leave  most  of  these 
expectations  still  problematical.  Its  enormous  value  to 
the  United  States,  which  nobody  doubts,  is  a  matter  for 
future    demonstration   in   peaceful    competition    among 

nations. 

The  history  of  the  United  States  since  1892,  aside  from 
these  great  expansional  manifestations  of  governmental 
power  and  increasing  wealth,  is  the  story  of  yesterday, 
familiar  to  all.  The  political  excitements  and  differences 
remain  yet  as  legacies  from  the  day  before  yesterday, 
which  are  reserved  for  discussion  on  the  stump  and  in  the 
halls  of  Congress. 

But  no  wonders  of  material  achievement  have  ever 
equaled  those  compressed  into  these  last  twenty-five  years. 
In  the  application  of  old  discoveries  to  the  field  of  me- 
chanics the  advance  has  been  as  a  series  of  miracles. 
Since    1892    the   American   "skyscraper"    building,    the 

[73  1 


lii 


EPISODES        OF        HISTORY 

perfection  of  the  phonograph,  the  present  moving  picture 
apparatus,  the  automobile,  the  aeroplane,  the  hydroplane, 
the  perfection  of  wireless  telegraphy,  electric  trolley  rail- 
ways, and  the  wonders  achieved  in  electrical  production 
and  lighting,  power  and  heating,  have  revolutionized  the 
world's  habits  of  living  and  communication  more  than  any 
previous  period  of  a  thousand  years.  The  processes  of 
business  have  been  equally  revolutionized  by  the  perfec- 
tion of  the  typewriter,  typesetting  machines,  telephones 
and  passenger  elevators. 

Most  of  the  mechanical  and  process  developments 
mentioned  are  so  familiar  to-day  that  it  is  difficult  to  realize 
the  time  when  they  were  not.  Yet  the  automobile  that 
goes  a  hundred  miles  an  hour  was  unknown  then;  the 
aeroplane  is  still  much  younger  and  yet  in  process  of 
perfection,  as  are  others  of  them  which  only  await  the 
touch  of  the  wand  of  genius,  which  may  fall  at  any  moment, 
to  carry  them  to  infinitely  greater  common  uses. 

During  the  period  under  review  the  North  America  added 
to  its  lines  of  fire  and  marine  insurance  those  of  protection 
to  automobiles,  parcels  post  shipments,  tourist  baggage 
and  other  subsidiary  lines  that  touch  various  sides  of  the 
life  of  the  nation.    It  has  taken  its  due  part  in  the  heat 
and  burden  of  the  protection  of  all  the  national  progress. 
In  1895  it  joined  in  the  establishment  of  the  Philadelphia 
Underwriters  and  the  issuance  of  joint  policies  under  that 
name.     The  Philadelphia  Underwriters  is  now  well  known 
and  represented  by  its  own  agents  all  over  the  country. 
In  1 9 10  the  Western  department  of  the  North  America, 
which  had  been  established  at  Erie,  Pennsylvania,  in  1864, 
was  removed  to  Chicago,  leaving  the  Western  department 
of  the  Philadelphia  Underwriters  still  located  at  Erie. 

In  January,  1905,  the  Alliance  Insurance  Company  of 
Philadelphia,  projected  in  the  fall  of  the  previous  year, 
began  business  under  the  supervision  of  the  administra- 
tive forces  of  the  Insurance  Company  of  North  America 

(74l 


<(  'p 


r  H  E 


NORTH        AMERICA 


and  is  still  so  conducted.  Within  a  year  and  a  few  months 
it  was  called  upon  to  pay  over  a  million  dollars  in  losses  in 
the  great  San  Francisco  conflagration  which  exhausted  its 
capital  and  surplus,  each  of  $500,000,  and  stockholders 
voluntarily  contributed  $733  J86  to  pay  all  obligations 
and  restore  its  funds.  Since  that  time  they  have  been 
further  strengthened  by  an  increase  in  capital. 

The  San  Francisco  conflagration,  which  shocked  the 
whole  world,  caused  property  losses  of  approximately 
$350,000,000.  Fire  insurance  companies  paid  about 
$175,000,000.  In  this  great  disaster  the  Insurance  Com- 
pany of  North  America  was  called  upon  to  pay  $3,260,000 
meeting  its  claims  honorably  and  promptly. 

The  conflagration  losses  of  this  period,  paid  by  the 
North  America  in  six  of  the  largest  conflagrations  amounted 
to  $4,433,890,  an  average  of  about  $740,000  for  each— 
the  combined  amount  being  nearly  three-fold  the  com- 
bined losses  paid  in  Chicago  and  Boston  in  the  confla- 
grations of  the  '70's. 

While  there  is  no  equivalent  for  the  conflagration  loss 
in  marine  underwriting,  it  is  interesting  to  note  that  since 
1888,  the  North  America  has  paid  sixty-one  claims  each 
of  $50,000  or  more,  incurred  upon  single  vessels. 

At  the  beginning  of  1 916,  the  North  America's  record 
of  business  transacted  from  its  organization,  December  10, 
1792  showed  total  receipts  from  premiums  amounting  to 
$276,983,911. 

From  the  early  beginnings  that  have  been  described,  it 
now  has  total  resources  of  over  $22,000,000  and  has  these 
funds  pledged  for  the  safety  of  approximately  one  and  a 
quarter  billions  of  dollars. 

It  has  upward  of  ten  thousand  agents  now  as  compared 
with  the  solitary  agency  in  Lexington,  Kentucky,  in  1807 
when  it  gave  birth  to  the  American  Agency  System  by 
that  appointment. 

As  the  North  America  enters  upon  its  one  hundred  and 

l7Sl 


\ 


INFORMATION    OBSCURED 


«  1 


J 


EPISODES        OF       HISTORY 

twenty-fifth  anniversary,  it  begins  also  a  new  administra- 
tive era,  the  present  oflScers  having  but  recently  taken  up 
the  reins  of  management,  pledging  themselves  to  conserve 
and  continue  to  strengthen  the  great  interests  entrusted 
to  them  —  interests  that  so  intimately  embrace  stock- 
holder, policyholder  and  agent  alike. 

These  officers,  with  the  departmental  heads  and  offices 
of  the  North  America  are: 

OFFICERS 
President  —  Benjamin  Rush. 
Vice-President  — -  John  O.  Piatt. 
Second  Vice-President  —  Sheldon  Catlin. 
Secretary  and  Treasurer  —  T.  Houard  Wright. 
Assistant  Secretaries  —  Galloway  C.  Morris,  John  Kremer. 

DEPARTMENTAL  OFFICES 
Western,  Chicago  —  C.  R.  Tuttle. 
New  England,  Hartford  —  Charies  E.  Parker. 
Southern,  Atlanta  —  Dan  B.  Harris. 
Pacific,  San  Francisco  —  J.  C.  Johnston. 

Before  closing  this  period  in  the  history  of  the  Insurance 
Company  of  North  America  reference  again  may  be 
fittingly  made  to  the  spoliation  claims  of  the  Eighteenth 
Century  growing  out  of  the  eariy  wars  in  the  history 
of  the  United  States,  which  furnish  so  strong  a  bond  be- 
tween the  present  and  the  past  that  every  president  and 
every  board  of  directors  of  the  North  America  has  had  to 
deal  with  them  down  to  the  present  time.  These  claims, 
growing  out  of  losses  sustained  on  insured  ships  of  com- 
merce, captured  by  the  enemy,  and  not  redressed  by 
the  government,  now  amount  to  $748,906.13.  The  total 
claims  of  a  similar  nature  still  pending  after  considerably 
more  than  a  century  has  elapsed,  amount  to  upward  of 
five  millions  of  dollars.  They  have  been  pressed  before 
every  Congress,  the  justice  of  the  claims  avowed  and  ap- 
proved time  and  again  before  many  committees  and  by 

[76J 


"THE 


tt 


NORTH       AMERICA 


separate  branches  of  the  Congress.  Twice  bills  were 
passed  appropriating  funds  to  pay  these  legacies  of 
Revolutionary  Days  but  were  vetoed  because  of  qih^ 
pressing  emergencies  at  the  time.  When  they  sh^ilpT>e 
eventually  paid,  this  particular  chapter  of  the  Insurance 
Company  of  North  America's  bond  with  earlyi^i&epen- 
dence  Days  will  be  closed,  but  it  will  ever  Ig^h  in  the 
heritage  of  the  personality  of  those  patriots  \Ji^Mought  the 
good  fight  and  made  possible  the  great  ^jted  States  of 
to-day.  A^ 

HISTORICAL  MEMORAND^Mfe92-1916 

Governmental. —  Venezuela  boundary  dispufts^^th  England  called  for  re- 
iteration of  Monroe  Doctrine  in  i8qs  and  resull«an  arbitration — Secretary  of  Com- 
merce and  Labor  added  to  cabinet  officerj^^^^j  —  Alaskan  boundary  dispute 
with  England  settled,  1903  —  Sixteenth  a^s^ndment  to  Constitution  giving  Con- 
gress power  to  tax  incomes  adopted  191 2  —  Seventeenth  amendment  to  Constitu- 
tion, providing  for  election  of  United  States  Senators  by  direct  vote  of  the  people 
passed,  1913. 

Ecottomic. —  United  States  acquires  Zone  in  Isthmus  of  Panama  for  construc- 
tion of  canal,  one  of  greatest  commercial  events  of  era  —  Government  begins 
irrigation  work  in  western  deserts  1902  — Laws  passed  protecting  people  from 
impure  foods,  for  railway  rate  regulation  and  protecting  nation's  forests  and 
streams  —  Federal  reserve  bank  system  adopted  to  prevent  panics  such  as 
occurred  in  1893  when  gold  reserve  was  depleted  for  first  time  in  country's  history. 

War. —  Cuban  rebellion  and  destruction  of  United  States  Battleship  Maine 
in  Havana  Harbor  (1898)  results  in  war  with  Spain  —  War  for  subjugation  of 
Philippines  1899  — Troubles  on  Mexican  border  1915-1916. 

Political. — ■  Grover  Cleveland  re-elected  president  1892  —  William  McKinley 
elected  president  1896,  re-elected  1900,  assassinated  1901,  and  Vice-President 
Theodore  Roosevelt  succeeded  —  Roosevelt  elected  President  1904  —  W^illiam 
H.  Taft  elected  President  1908  —  Woodrow  Wilson  elected  President  191 2;  re- 
elected, 1916. 

Territorial. —  Utah  admitted  1896  —  Hawaiian  Islands,  area  of  6,449 
square  miles,  annexed. —  Guam,  210  square  miles,  Porto  Rico,  3.43S  square  miles, 
and  Philippines,  115,026  square  miles  acquired  for  $20,000,000  in  1898  under 
peace  treaty  with  Spain  —  Samoan  Islands  divided  with  Germany  in  1899  by 
which  United  States  acquired  six  islands  with  area  of  27  square  miles  —  Okla- 
homa admitted  as  state  1907  —  New  Mexico  and  Arizona  admitted  as  states 
1912,  making  total  number  of  states  48  — Total  national  area  1916,  3,026,789 
square  miles. 

Insurance. —  William  A.  Piatt,  elected  vice-president  Insurance  Company 
of  North  America  1890,  died  April  i,  1895,  George  H.  McFadden  successor  — 
Philadelphia  Underwriters  department  established  at  Erie  1895  —  Eugene  L. 

[77I 


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ll 


EPISODES        OF        HISTORY 

Ellison  elected  vice-president  January,  1897,  succeeding  George  H.  McFadden. 
retired  —  Benjamin  Rush  elected  second  vice-president  January,  1898  —  Gre- 
ville  E.  Fryer,  secretary  since  January  12, 1881,  died  July  27, 1898,  and  was  suc- 
ceeded by  T.  Houard  Wright  —  Alliance  of  Philadelphia  under  management  of 
North  America  officials  began  business  January  i,  1905  —  Charles  Tlatt,  seventh 
president,  elected  January  18,  1878,  died  January  23,  1909,  age  79  years  — 
Eugene  L.  Ellison,  eighth  president,  elected  November  3,  1909,  Benjamin  Rush 
vice-president  —  John  O.  Piatt,  elected  second  vice-president  January.  1910  — 
Western  Department  headquarters  at  Erie,  Pa.,  since  1864,  removed  to  Chicago 
1910  —  Duties  of  treasurer  added  to  T.  Houard  Wright,  also  secretary,  1912  — 
Eugene  L.  Ellison,  president  since  November  3, 1909,  died  February  8, 1916,  aged 
71  years  —  Benjamin  Rush,  ninth  president,  elected  March  7,  1016  John  O. 
Piatt,  vice-president,  Sheldon  Catlia,  second  vice-president. 


I78I 


PERSONALITY  IN  ACHIEVEMENT 

1792-1916 

There  is  a  carved  and  paneled  chamber  in  what  is  now 
called  Independence  Hall  in  Philadelphia  in  which  the 
greatest  political  events  of  American  history  were  born. 
From  the  walls  of  this  chamber  look  down  to-day  the 
portraits  of  the  men  who  created  the  United  States  of 
America.  In  the  center  of  that  chamber  one  may  know 
that  he  stands  on  the  very  spot  where  the  spark  of  political 
liberty  was  struck  into  flame  that  was  to  illuminate  the 
whole  world,  that  was  to  encourage  revolution  in  France 
and  that  was  ultimately  to  become  the  great  beacon  of  the 
American  republic. 

In  this  chamber  the  Continental  Congress  met; 
here  the  colonies  were  advised  to  become  independent 
states,  masters  of  their  own  home  affairs;  here  the  plan  of 
a  Confederation  of  States  was  first  broached;  here  on 
July  4,  1776,  the  Declaration  of  Independence  was  for- 
mally adopted  and  its  immortal  text  solemnly  signed  by  the 
consecrated  rebels  who  were  to  become  the  Fathers  of  the 
Country;  here  Washington  was  called  to  lead  the  armies; 
here  he  was  elected  first  President  of  the  revolutionary 
government  in  1787  and  here  re-elected  in  1791 ;  here  "The 
President,  Directors  and  Company  of  the  Bank  of  North 
America"  was  given  its  charter  under  Robert  Morris  to 
finance  the  Revolution.  And  here,  finally,  on  the  tenth 
day  of  December,  1792,  was  formally  organized  "The 
President  and  Directors  of  the  Insurance  Company  of 
North  America." 

Men  become  historical  through  the  things  they  do; 
history  becomes  interesting  through  the  men  that  do 
things.     In  the  history  of  the  United  States  the  men  who 

l79l 


I 


EPISODES        OF        HISTORY 


directed  events  from  Independence  Hall  have  their  due 
places,  but  the  private  "lives,  the  fortunes  and  the  sacred 
honor"  which  they  then  pledged  to  the  creation  of  the 
new  republic  were  to  have  activities  and  devotions  not 
less  honorable,  though  not  as  glorious,  perhaps,  as  their 
public  conduct.  It  is  interesting  as  a  light  upon  the 
biography  of  an  old  corporation  to  see  how  the  personali- 
ties that  entered  upon  the  struggle  for  independence,  and 
the  atmosphere  of  self-reliance  and  resolution  that  en- 
veloped them,  touched  at  all  sides  and  entered  into  the 
creation  and  development  of  the  Insurance  Company  of 
North  America. 

When  "the  President,  Directors  and  Company  of  the 
Bank  of  North  America"  was  organized  in  1781,  its  head 
and  active  spirit  was  Robert  Morris,  "the  Financier  of  the 
Revolution,"  that  indomitable  and  dauntless  man  of 
business  who  was  the  support  of  Washington  and  his  armies 
in  the  field,  and  the  business  counselor  and  inspirer  of  the 
provisional  organization  on  the  floor  of  the  Continental 
Congress.  He  it  was  who  raised  the  money  for  the 
revolution,  who  organized  the  first  financial  system  of  the 
scattered  states,  who  literally  pledged  his  life,  all  his 
fortune  and  his  sacred  honor  to  the  cause  and  who  re- 
deemed in  full  all  but  his  personal  fortune.  He  guar- 
anteed when  he  retired,  the  liabilities  of  the  United  States 
Treasury  incurred  under  his  management  and  though  he 
died  poor  in  purse  he  was  rich  in  honor  and  achievement. 

Closely  associated  with  Robert  Morris  in  his  patriotic 
activities  from  1774  forward  was  John  Maxwell  Nesbitt, 
who  had  subscribed  personal  funds  and  given  invaluable 
personal  activities  to  the  support  of  Washington  and  the 
Army.  He  was  in  1774  forty-six  years  old,  of  Irish  birth, 
a  widely  known  and  successful  merchant,  who  organized 
the  Bank  of  Pennsylvania  to  support  the  state  in  its 
movement  to  achieve  independence.  He  was  one  of 
those  selected  by  Robert  Morris  to  be  a  director  of  the  new 

[80] 


(( 


THE 


ft 


NORTH       AMERICA 


Bank  of  North  America,  a,nd  thenceforward  they  were 
intimately  associated  together  in  the  long  struggle. 

John  M.  Nesbitt,  called  upon  in  1792  to  become  the 
president  of  the  new  insurance  company  brought  to  that 
organization  the  prestige  and  the  traditions  of  "the  Pres- 
ident, Directors  and  Company  of  the  Bank  of  North 
America,"  and  here  we  come  upon  the  origin  of  the  very 
unusual  name  of  the  new  company  chartered  as  "the 
President  and  Directors  of  the  Insurance  Company  of 
North  America. " 

Associated  with  Mr.  Nesbitt  in  the  new  company  were 
two  prominent  Philadelphia  citizens  who  were  more  active 
in  its  promotion  than  he.  These  were  Ebenezer  Hazard 
and  Samuel  Blodget,  Jr.  Mr.  Hazard  was  in  1792  forty- 
seven  years  old,  of  distinguished  family,  graduate  of 
Princeton  College.  At  seventeen  he  was  a  sailor  aboard  a 
privateer  of  war,  afterwards  entered  business  as  a  book- 
seller and  became  identified  with  literary  activities.  He 
was  at  thirty-seven  the  third  Postmaster-General  of  the 
United  States,  succeeding  Benjamin  Franklin  and  Richard 
Bache,  and  was  highly  successful  as  an  executive  and 
administrative  officer.  Samuel  Blodget,  Jr.,  ten  years 
younger  than  Mr.  Hazard,  had  already  a  distinguished 
career.  Of  strong  imagination,  bold  in  conception  and 
resolute  in  action,  he  had  spent  three  years  in  the  Con- 
tinental Army,  part  of  the  time  on  the  staff  of  Washington, 
with  whom  he  was  intimate.  Mr.  Blodget  had  planned 
the  present  national  capital  city  of  Washington,  to  which 
he  devoted  much  time.  General  Washington  urged  him 
to  invest  $100,000  in  lands  adjoining  the  city  he  had 
planned,  but  the  profits  of  this  were  not  to  be  realized 
until  the  third  generation. 

Mr.  Hazard  was  selected  as  first  secretary  of  the  new 
company  he  had  so  ably  helped  to  promote,  and  Mr. 
Blodget,  who  was  the  leader  of  the  idea,  became  by  vote 
Director  No.  i  of  the  Board.     He  died  in  1814. 

[81] 


EPISODES       OF       HISTORY 


, 


J^ 


Colonel  Charles  Pettit,  one  of  the  original  organizers  and 
second  president  of  the  company,  had  held  ofl5ce  in  the 
colony  of  New  Jersey,  but  entered  the  revolutionary 
struggle  as  assistant  quartermaster-general  under  General 
Nathaniel  Greene.  He  was  a  member  of  the  Continental 
Congress,  and  rendered  much  public  service  to  the  state  of 
Pennsylvania.  His  interests  in  the  Insurance  Company  of 
North  America  have  descended  to  the  present  time.  One 
son  was  a  director  for  thirty-two  years,  and  a  grandson, 
Thomas  Charlton  Henry,  elected  a  director  in  1864,  was 
elected  vice-president  in  1880,  dying  in  1890.  Colonel 
Pettit's  portrait  was  painted  by  Gilbert  Stuart,  painter  of 
the  celebrated  portrait  of  Washington. 

Joseph  Ball,  second  signer  of  the  new  company's 
original  agreement,  was  manager  of  the  Cox  Iron  Works  at 
Batsto,  New  Jersey,  where  the  shot  and  shell  for  the 
Continental  Army  were  largely  manufactured.  He  con- 
tributed liberally  to  the  Revolution.  He  was  a  director 
of  the  Bank  of  the  United  States  and  was  one  of  the 
original  board  of  the  Insurance  Company  of  North 
America  and  acted  as  president  pro  tern  during  the 
incapacitation  of  Colonel  Pettit. 

There  were  many  others  among  the  original  subscribers 
to  the  stock  of  the  company  who  performed  active  service 
in  the  war  for  independence,  but  these  five  leaders  in  the 
promotion  of  the  Insurance  Company  of  North  America 
sprang  from  the  very  vital  center  of  the  patriotic  move- 
ment which  in  1783  had  ended  by  articles  of  peace  with 
England  signed  at  Paris.  There  remained,  however,  many 
threatening  conditions,  due  to  the  weakness  of  the  new 
Republic  and  the  political  animosities  and  distrust  that 
follow  wars.  The  United  States  was  deprived  of  many  of 
the  business  connections,  traditions  and  exchange  facilities 
we  had  enjoyed  with  England.  War  might  be  renewed 
at  any  time  —  as  ultimately  it  was  —  and  so  the  public 
and  private  business  life  of  the  young  nation  had  to  be 

I82I 


(( 


THE"       NORTH       AMERICA 


i 


u 


created  out  of  its  own  soil.  Men  who  had  been  on  the 
battle  line,  who  had  been  behind  its  finances,  who  knew 
the  necessities  of  private  business,  all  united  in  the  task  of 
construction. 

The  necessity  of  native  insurance  for  the  new  native 
commerce  with  foreign  countries  was  pressing.  It  was 
supplied  for  a  time  by  individual  underwriters  until  the 
joint  stock  company  of  the  North  America  was  formed. 
That  company  sprang  directly  out  of  the  heart  of  the 
Revolution. 

By  a  coincidence  felicitous  in  a  sense,  logical  in  its 
business  import,  the  building  recently  acquired  by  the 
North  America  in  Philadelphia  for  the  extension  of  its 
home  offices,  was  at  one  time  owned  by  Benjamin  Rush, 
one  of  the  signers  of  the  Declaration  of  Independence, 
whose  great  grandson  is  the  present  president  of  the  com- 
pany; and  the  site  of  the  principal  building  was  once 
occupied  by  a  residence  in  which  Alexander  Hamilton 
lived.  Thus  closely  does  the  early  atmosphere  of  its  origin 
continue  about  the  oldest  American  company. 

The  first  ofiice  was  in  a  brick  building  at  No.  119  Front 
Street,  which  in  1880  was  one  of  the  few  original  structures 
remaining  of  early  Philadelphia,  and  it  was  interesting 
enough  then  to  attract  the  pencil  of  the  celebrated  etcher, 
Charles  M.  Pennell,  who  afterwards  made  the  pictures  of 
Whistler  so  famous  by  his  skill  in  etched  reproduction. 
The  first  president,  John  M.  Nesbitt,  lived  across  the  street 
from  the  first  office  above  the  counting  house  of  his  firm 
of  Conyngham,  Nesbitt  &  Co.,  as  was  the  custom  of 
merchants  of  the  day.  During  periods  of  yellow  fever  the 
office  was  removed  to  the  famous  Vaux  house,  itself  an 
historic  place  in  Philadelphia.  Since  organization  the 
company  has  occupied  seven  office  sites  within  the  central 
business  district  of  Philadelphia.  The  present  home  office 
site  on  Walnut  Street  was  purchased  in  1851  and  has  been 
enlarged  by  other  purchases.     Here  in  1881  the  company 

I83I 


1  \ 


EPISODES       OF 


HISTORY 


moved  into  the  building  expressly  designed  for  its  purpose 
and  completed  in  that  year. 

Among  many  interesting  records  and  souvenirs  of  the 
early  days  is  that  of  policy  numbered  3391,  issued  to 
"Bushrod  Washington, Esq.,"  nephew  of  George  Washing- 
ton, reading: 

"Insurance  of  $4,000  on  a  brick  barn 

situate  at  Mt.  Vernon,  in  Fairfax 

County,  in  the  State  of  Virginia." 
The  archives  of  the  company  contain  many  things  of 
interest  to  the  student  of  insurance  and  surprising  to  the 
agency  field  of  to-day.    Those  accustomed  to  the  present 
rigorous   detailed   reports   and   to   the  supervision   and 
co-operation  of  many  hands  from  the  solicitation  of  the 
risk  to  the  possible  payment  of  the  loss,  would  be  surprised 
at  the  ease  and  directness  with  which  insurance  was  trans- 
acted as  a  personal  and  private  contract  between  the 
insurer  and  the  insured,  with  no  interminable  agreements 
beyond    the    insurance    undertaken    under    custom    as 
set  forth  in  the  generally  announced  "proposals"  of  the 
company.    The  rate  was  given,  the  property  described 
and  the  transaction  was  complete  when  the  premium  was 
paid.     Thirteen  years  after  the  company  began  business 
it  was  proud  to  announce  that  no  litigation  had  ever  come 
up  from  any  policyholder  and  that  every  loss  had  been 
paid  with  "promptitude  and  exactness."     From  that  date, 
1806,  with  the  appointment  by  the  North  America  of  the 
first  American  local  agent,  when  the  company's  business 
and  all  insurance  began  to  expand  to  distant  places  under 
complex   conditions,   its   archives  show   the   growth  of 
custom,  formula,  requirement  and  practice  in  the  metic- 
ulous  details  that  have  developed  underwriting  at   the 
home  office  and  managerial  offices  and  in  the  local  agency 
to  the  scientific  basis  of  a  profession. 

There  have  been  nine  presidents  of  the  North  America 
since  1792.    Of  the  personal  history  of  the  first  three  an 

[84] 


*'THE"       NORTH       AMERICA 


account  has  been  given  briefly  above  in  this  chapter.  John 
M.  Nesbitt  was  first,  elected  December  11,  1792  at  the 
first  meeting  at  the  "  City  Tavern."  He  retired  January  13, 
1796,  being  then  sixty-eight  years  of  age  and  of  frail  health 
and  died  in  1802.  Colonel  Chas.  Pettit,  who  succeeded 
him  January  13,  1796,  resigned  January  8,  1798  being  for 
a  time  incapacitated  as  the  result  of  a  serious  accident 
encountered  while  driving.  Joseph  Ball  was  elected  to 
succeed  him,  but  on  Colonel  Pettit 's  recovery  resigned 
July  8,  1799  and  Colonel  Pettit  was  re-elected  and  served 
until  September  3,  1806,  when  he  died  in  office. 

John  Inskeep,  the  fourth  president,  had  been  a  captain 
of  militia  in  the  Revolutionary  War,  was  Mayor  of  Phila- 
delphia and  a  successful  merchant  in  the  China  trade  when 
he  was  elected  October  i,  1806.  His  administration 
continued  a  few  months  short  of  twenty-five  years,  when 
on  April  5,  1831,  he  resigned  because  of  ill  health  and  in- 
firmities. Under  his  bold  and  enterprising  leadership  were 
begun  those  advances  and  expansions  into  other  states 
that  inaugurated  the  American  local  agency  system  and 
carried  the  name  of  the  company  ultimately  to  every  part 
of  the  land  as  the  country  was  settled.  He  laid  deeply  the 
foundations  of  the  North  America  in  the  field  and  his 
services  were  highly  appreciated  by  the  stockholders  and 
the  board.  He  was  a  native  of  New  Jersey,  born  there 
January  1757  and  died  at  his  home  in  Philadelphia 
December  18,  1834  at  the  age  of  seventy-seven.  He  had 
been  a  director  since  1802. 

John  Corry  Smith,  fifth  president,  was  chosen  to  suc- 
ceed Mr.  Inskeep.  Mr.  Smith  had  been  elected  a  director 
only  a  few  months  before,  but  was  an  active  and  successful 
merchant.  Born  in  Philadelphia  1784  he  died  suddenly 
June  22, 1845,  at  the  age  of  61,  after  being  fourteen  years 
in  the  presidency. 

Arthur  Oilman  Cofiin  succeeded  as  the  sixth  president 
July  1, 1845.    He  was  a  native  of  Massachusetts  and  had 

18s  1 


! 


I. 


' 


EPISODES        OF        HISTORY 


been  elected  secretary  of  the  Insurance  Company  of  North 
America  in  1832.  Mr.  Coffin  was,  therefore,  underwriter 
as  well  as  executive,  and  during  his  executive  administra- 
tion of  thirty-three  years  he  met  and  faced  the  problems 
of  modern  underwriting  with  marked  success  and  admi- 
rable tact.  In  his  term  the  powers  of  boards  of  directors 
and  details  were  gradually  transferred  to  the  expert  execu- 
tive and  administrative  oflEicers.  Under  his  direction  the 
company  made  great  strides  both  in  business  and  in  con- 
dition. When  he  took  charge  the  North  America  had 
total  assets  of  $426,507.  When  he  relinquished  his 
office  in  1878,  the  company  was  in  possession  of  total 
assets  of  $6,461,729.  It  was  a  great  achievement,  and 
although  his  health  had  begun  to  fail  and  he  desired  to 
escape  the  burdens  of  business,  the  company  was  loath  to 
accept  his  resignation.  He  was  prevailed  upon  to  remain 
as  a  director  and  give  his  counsel  and  advice.  Mr. 
Coffin  resigned  as  president  January  14,  1878  and  died 
July  29,  1881  at  the  age  of  eighty-two.  During  his  long 
life  he  had  been  active  in  all  the  great  public  and  private 
civic  movements  in  Philadelphia. 

Charles  Piatt,  who  was  elected  as  the  seventh  president 
to  succeed  Mr.  Coffin  January  14, 1878,  brought  to  the 
office  twenty-eight  years  of  training  in  the  affairs  of  the 
North  America  as  the  co-worker  and  first  lieutenant  of  his 
predecessor.  Born  in  February  1829,  son  of  an  eminent 
Philadelphia  merchant  in  the  China  trade,  he  was  an  honor 
graduate  of  the  University  of  Pennsylvania  at  eighteen. 
At  once  he  sailed  for  China,  where  he  remained  some  time 
studying  the  sources  and  methods  of  the  Oriental  trade. 
At  twenty-one  he  returned  as  a  partner  in  the  house.  Ten 
years  later,  in  i860,  he  became  secretary  of  the  North 
America  and  was  elected  vice-president  in  1869.  Mr. 
Piatt  had  a  thorough  knowledge  of  marine  as  well  as  fire 
insurance  and  was  president  of  the  National  Board  of 
Marine  Underwriters  and  of  the  Philadelphia  Marine 

[861 


(( 


THE"        NORTH        AMERICA 


Board  for  many  years.  His  term  of  service  as  president 
of  the  North  America  was  thirty-one  years  and  as  his 
tenure  succeeded  and  continued  the  wise  and  strong  policies 
pursued  under  Mr.  Coffin,  their  two  terms  covered  sixty- 
four  years  of  uninterrupted  growth,  during  which  the 
company  was  called  upon  to  pay  without  delay  or  strain 
$5,629,000  of  conflagration  losses,  of  which  more  than 
half  was  encountered  in  the  single  disaster  at  San  Fran- 
cisco. Among  modern  scientific  underwriters  in  the  fire 
and  marine  branches  none  stood  higher  than  Mr.  Piatt, 
who  was  long  a  leader  in  the  civic  affairs  of  Philadelphia. 
He  died  in  his  eightieth  year,  January  23,  1909,  a  few  days 
after  his  re-election  for  the  thirty-first  time  as  president 
and  after  forty-nine  years  of  service  to  the  company  he 
had  directed  with  great  and  signal  ability. 

Eugene  L.  Ellison,  eighth  president,  succeeded  Mr. 
Piatt  by  election  November  3,  1909.  He  had  entered  the 
company's  agency  service  in  1871,  was  elected  assistant 
secretary  in  1884,  second  vice-president  November,  1890 
and  first  vice-president  January,  1897.  He  was  a  native  of 
Delaware  and  his  early  business  training  was  in  the  clear- 
ing house  of  Philadelphia  banks.  He  then  became  a 
general  agent  of  the  old  Enterprise  Insurance  Company 
and,  when  that  company  retired,  began  a  service  with  the 
North  America  that  was  to  continue  forty-five  years  to  his 
death.  Mr.  Ellison's  administration  was  a  continuation 
of  the  firm  and  strengthening  policy  of  his  predecessors. 
When  he  took  the  presidency  the  company  had  total 
assets  of  $13,344,638.  After  six  years  they  had  increased 
to  $20,838,450  and  its  surplus  was  strengthened  from 
$2,333,897  to  $6,080,043.  His  term  was  comparatively 
short.  He  died  of  heart  disease,  without  warning,  while 
seated  at  his  desk,  February  8,  19 16,  after  less  than  seven 
years  in  the  presidency,  at  the  age  of  seventy-one. 

Benjamin  Rush,  ninth  president,  and  the  present  in- 
cumbent, succeeded  Mr.  Ellison  by  election  March  7, 1916. 

[87I 


i 


I 


If! 

1 


') 


r' 


EPISODES        OF        HISTORY 


Taking  leave  here  in  this  brief  biography  of  a  cor- 
poration so  closely  interwoven  with  the  national  life,  it 
may  be  predicted  with  confidence  that  the  leave-taking  is 
temporary  only.  The  Insurance  Company  of  North 
America  was  never  stronger  or  better  equipped  for  large 
achievement  and  long  life  than  at  present.  In  1885  a 
r6sum6  of  its  history  with  interesting  photographs  of  its 
souvenirs  and  relics  was  printed  in  commemoration  of  its 
Ninetieth  Anniversary.  The  present  volume  renews  the 
summary  of  those  ninety  years  and  brings  the  story 
down  to  the  One  Hundred  and  Twenty-fifth  year. 

Its  history  for  the  future  is  to  be  made  by  the  pres- 
ent management  and  the  great  body  of  its  local  agents 
throughout  the  country.  The  story  of  the  future  will 
be  written  by  others.  The  making  of  the  material  is 
the  work  of  those  now  joined  together  to  justify  and 
perpetuate  the  work  of  those  gone  before. 


[881 


STABILIZER   OF   NATIONS: 
INSURANCE 

Behind  the  new  world  of  amazing  wealth  and  industrial 
power  described  in  the  preceding  pages,  there  became 
necessary  and  was  created  an  intricate  system  of  credit 
and  exchange.  The  strongest  foundation  of  the  credit 
and  the  best  protection  of  the  individual  share  of  each 
person  in  that  wealth  is  Insurance  —  the  great  Stabilizer 
of  commerce,  manufactures,  banking  and  all  material 
development.  Responding  to  the  demands  of  national 
power  and  national  development  of  industry  and  wealth  — 
often  indeed,  anticipating  and  for  the  moment  sometimes 
exceeding  them  —  Insurance  in  every  branch  has  expanded 
in  volume  and  adapted  itself  in  special  lines  to  cover  every 
need  of  the  people  during  these  past  twenty-five  years. 
Every  man  engaged  in  the  business  of  Insurance  may  well 
take  pride  in  the  part  that  the  body  of  sound  and  progres- 
sive companies  have  taken  in  this  wonderful  organization 
and  protection  of  the  national  resources.  The  record  of 
Insurance  has  not  been  surpassed  in  proportion  by  any 
other  factor  in  the  national  progress  —  not  even  by  the 
National  Government  itself. 

The  Insurance  Company  of  North  America  bore  its 
share  in  these  achievements,  as  it  has  from  the  very  birth 
of  the  nation.  As  a  child  of  the  Revolution  it  has  had  the 
courage  of  its  parentage  and  has  inherited  of  the  estate  of 
national  success.  Everywhere — sustaining  ocean  marine 
commerce  and  protecting  the  marvelously  growing  in- 
ternal wealth  of  the  country  — it  has  done  its  part  of  the 
work  and  received  its  share  of  the  rewards,  its  army  of 
local  agents  sharing  with  it  all  of  labor  and  reward. 

During  the  twenty-five  years,  inclusive,  from  1891  to 

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EPISODES        OF        HISTORY 

1915,  the  aggregate  premium  income  of  all  the  companies 
tabulated  by  the  National  Board  of  Fire  Underwriters 
increased  from  $120,000,000  in  1891  to  $349,000,000  in 
191 5.  During  the  twenty-three  years,  inclusive  from  the 
close  of  its  One  Hundredth  year,  the  Insurance  Company 
of  North  America  has  received  almost  double  the  whole 
amount  of  premiums  it  collected  during  the  preceding 
hundred  years  and  when  a  full  twenty-five  years  shall 
have  elapsed,  will  more  than  double  the  record.  The 
comparison  follows : 

First  hundred  years,  1 792-1892 $104,180,328 

Twenty-three  years,  1893-1915 172,803,529 

Total  for  1 23  years $276,983,91 1 

The  North  America  has  proper  pride  in  the  fact  that 
while  it  is  an  institution  for  profit  it  has  rendered  dis- 
interested Public  Service  to  the  country  in  good  and  bad 
times  alike.  In  this  it  has  stood  with  the  body  of  sound 
companies  that  compose  the  institution  of  Fire  Insurance 
in  the  United  States.  It  has  always  been  a  leader  from 
the  moment,  One  Hundred  and  Eight  years  ago,  it  began 
to  create  the  American  local  agency  system  by  the  appoint- 
ment of  an  agent  at  Lexington,  Kentucky.  The  growth 
of  the  idea  may  be  seen  in  the  quarter  of  a  million  insur- 
ance agents  to-day  who  have  so  well  protected  the  business 
interests  of  every  individual,  village,  city  and  state.  This 
in  Fire  Insurance  alone. 

In  its  marine  department,  a  few  years  ago,  it  performed 
a  service  that  carried  money  into  the  pockets  of  the 
people  everywhere  by  a  protection  that  was  to  all  appear- 
ances intended  for  one  class  alone. 

The  enormous  shipments  of  live  stock  to  European 
ports  were  formerly  attended  with  great  losses  among  the 
cattle,  caused  by  lack  of  air  space  on  shipboard,  poor 
ventilation,  neglect,  and  the  ignorance  of  ships'  crews. 
The  insurance  premium  rose  as  high  as  seven  per  cent  for 

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"THE"        NORTH       AMERICA 


the  voyage,  an  exceedingly  heavy  drain  on  the  values,  and 
yet  unprofitable  also  to  the  company  writing  the  insur- 
ance. The  Insurance  Company  of  North  America  took 
the  matter  up  direct  with  shippers  and  offered  to  provide 
regulations  by  which  the  deaths  would  be  prevented  and 
rates  greatly  reduced.  The  offer  was  accepted  and  regu- 
lations were  prepared  and  put  into  operation,  with  the 
result  that  the  rates  fell  from  seven  per  cent  to  as  low  as 
one  quarter  of  one  per  cent.  It  was  not  only  more  profit- 
able to  the  company  at  that  rate,  but  it  put  six  cents  in 
every  dollar  involved  back  into  the  pockets  of  the  cattle- 
raiser,  saved  to  him  from  the  ocean.  When  it  is  re- 
membered how  many  millions  of  money  have  been  in- 
volved in  live  stock  exports,  the  effect  is  like  a  realization 
of  the  well-known  dream  of  some  scientist  to  get  gold  from 
ocean  water.  In  this  alone  the  North  America  has  saved 
the  country  more  millions  than  the  combined  profits  of 
all  the  insurance  companies. 

A  quick  review  will  show  the  disinterested  Public 
Service  that  Insurance  has  rendered  the  nation.  Since 
the  organization  of  the  National  Board  of  Fire  Under- 
writers in  1866  (of  which  the  Insurance  Company  of 
North  America  was  and  is  an  original  member),  Fire 
Insurance  especially  has  developed  rapidly  upon  lines 
of  scientific  accuracy  and  security.  Accumulations  of 
funds  have  been  so  managed  that  now  the  conflagration 
hazard,  which  must  always  remain  a  great  danger  to 
companies  and  public  alike,  is  protected  with  every  care 
possible.  Widely  disseminated  systems  of  Schedule 
Rating  have  resulted  in  a  nation-wide  education  of 
architects,  builders,  and  property  owners  in  the  methods 
of  safety  in  building.  The  property  owner  does  now,  in 
fact,  largely  make  his  own  rates  of  insurance  for  his  own 
risk,  and  by  safe  building  reduces  the  hazard  of  his  own 
risk,  the  risks  of  his  neighbors,  and  so  also  the  general 
conflagration  risk,  while  at  the  same  time  he  reduces  his 

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EPISODES        OF        HISTORY 

own  and  other  rates  in  proportion.  This  may  fairly  be 
termed  disinterested  Public  Service  because  (as  was  the 
case  of  the  North  America  in  the  live-stock  marine  in- 
cident), though  the  insurance  companies  profit  by  the 
reduced  risk,  they  receive  a  much  smaller  premium  rate, 
and  individuals  and  communities  are  thus  saved  from 
fires  and  the  consequential  damages  to  business  against 
which  Insurance  can  never  be  applied  to  render  full 
protection. 

Under  the  national  inspection  service  of  the  National 
Board,  the  equipment  and  management  of  fire  depart- 
ments have  been  greatly  improved,  the  systems  of  water- 
supply  for  towns  and  cities  have  been  largely  perfected 
and  extended,  and  the  safety  of  communities  in  many 
instances  assured  where  before  there  was  constant  danger 
of  heavy  losses.  Modern  salvage  corps  companies,  sup- 
ported by  insurance  companies,  protect  uninsured  and 
insured  property  alike  from  destruction.  Through  the 
organization  of  the  Underwriters'  Laboratories  every  in- 
vention and  manufacture  that  enters  into  protection 
against  the  danger  of  fire  is  carefully  tested  and  its 
efficiency  for  the  purpose  given  an  authoritative  approval 
that  entitles  it  to  due  value  in  credits  for  rates  everywhere. 
By  these  very  same  methods  of  safeguarding  property. 
Fire  Insurance  becomes  at  once  one  of  the  most  powerful, 
skillful,  and  insistently  employed  forces  for  the  pre- 
vention of  accident  and  the  needless  sacrifice  of  life.  Thus 
are  the  three  great  branches  of  Insurance  intertwined. 

In  every  state  and  jurisdiction  the  companies,  through 
their  field  forces,  have  established  organizations  to  lead 
in  popular  education  in  fire  prevention  and  fire  protection. 
They  have  succeeded  in  having  fire  prevention  rules  taught 
in  the  public  schools  of  many  states.  Thousands  of  local 
societies  have  been  encouraged  to  take  supervision  of  the 
condition  of  premises  generally  in  order  to  prevent  accumu- 
lations of  trash  in  which  fires  too  often  originate  or  through 

[92] 


"THE"        NORTH       AMERICA 


the  existence  of  which  fires  spread.  "Fire  Prevention 
Day"  has  been  established  in  almost  every  state  and  city 
for  the  purpose  of  encouraging  *' clean-ups." 

All  these  innumerable  disinterested  services,  valuable 
to  safety,  to  sanitation,  and  to  the  comfort  and  beauty  of 
life,  have  been  originated  and  pushed  to  practical  efficiency 
by  associated  Insurance.  In  every  one  of  these  directions 
the  Insurance  Company  of  North  America  has  borne 
always  its  full  share  of  the  labor  and  expense,  thus  con- 
tributing now  as  at  the  first  to  the  building  up  of  the  coun- 
try in  every  practical  way. 

During   the   twenty-five   years   now   rapidly   closing, 
Insurance  passed  through  perils  not  less  threatening  than 
those  the  country  had  to  face,  and  not  less  triumphantly 
overcame    them.    In    sixteen    years,    six    conflagrations 
alone    destroyed    $449,000,000    of    property,    of    which 
$235,000,000  was  insured  —  and    every   loss    was    paid. 
The  destruction  of  San  Francisco  in  April,  1906,  by  fire 
following    an    earthquake,     shocked    the    world.     The 
estimated  property  losses  were  so  enormous  that  for  the 
moment  the  assistance  of  the  national  government  and 
of  foreign  countries  was  tendered  to  tide  over  the  distresses 
of  sufferers.     Behind  this  stalked  the  possible  destruction 
of  credit  and  the  ruin  of  a  great  city  by  any  delay.     Under 
a  strict  construction  of  the  contract  there  were  doubts 
as  to  the  extent  of  liability  of  fire  insurance  companies  for 
thousands  of  losses.    Then  happened  what  often  occurs 
under  stress  of  war,  when  conditions  arc  abnormal  and  no 
law  is  sufficient.     The    insurance    companies    abolished 
the  doubt,  rallied  instantly  to  the  rescue  of  the  stricken 
city  and  paid  their  losses  practically  in  full.     To  do  this 
without  affecting  the  stability  of  the  insurance  companies 
was  a  serious  problem.     It  was  heroically  solved  by  the 
stockholders  of  many  companies  contributing  nearly  one 
hundred  millions  of  new  funds. 

Fire    insurance    companies    alone    paid    more    than 

[93] 


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EPISODES        OF       HISTORY 

$175,000,000  of  losses  in  San  Francisco;  life  insurance 
companies  contributed  more  than  $100,000,000  in  cash 
loaned  on  policies  and  paid  in  death  losses,  besides  $85,- 
000,000  loaned  on  real  estate  values,  and  casualty  and 
miscellaneous  insurance  companies  did  their  share  with 
equal  liberality.  Immediately  the  rebuilding  of  the  city 
began  and  business  connections  of  its  merchants  were 
maintained.  In  nine  years  the  new  and  finer  city  opened 
the  gates  of  the  Panama-Pacific  International  Exposition 
to  the  world,  by  solemn  religious  services  acknowledging 
the  gratitude  of  the  city  to  the  System  of  Insurance,  which 
was  described  by  ministers  and  laymen  as  a  demonstration 
in  business  of  the  organized  strength  of  the  Brotherhood  of 
Man.  On  the  program  of  the  Exposition,  Insurance  was 
provided  for  both  in  exhibitions  and  demonstrations  as  a 
great  Social  Economy,  and  near  its  close  a  World's  In- 
surance Congress  was  held  to  discuss  the  nature  of  In- 
surance as  a  Universal  Social  Economy. 

The  status  of  Insurance  in  the  United  States  as  the 
Insurance  Company  of  North  America  rounds  into  its 
One  Hundred  and  Twenty-Fifth  Year  is  worthy  of  the 
amazing  wealth  and  power  that  has  been  described,  and 
which  it  supports  at  the  foundation.  Like  that  wealth 
and  power  it  has  been  gradually  but  resolutely  developed 
with  the  nation  itself  from  its  speculative  beginnings  up 
to  the  scientific,  sound  and  rapidly  expanding  institution 
for  protection  and  indemnity  of  to-day,  until  it  penetrates 
to  the  homes  and  daily  needs  of  the  people  more  univer- 
sally than  in  any  other  country  of  the  world.  The  ac- 
cumulated assets  of  all  the  branches  of  insurance  were 
tabulated  in  191 6  as  follows: 

Life  insurance $5,667,570,992 

Fire  insurance 759.287,359 

Casualty  and  Surety 64,630,461 

Grand  total $6,491,488,812 

[94] 


"THE"        NORTH        AMERICA 


The  great  preponderance  of  assets  held  by  the  life 
insurance  companies  is  because  of  the  perpetual  nature  of 
their  contracts,  while  in  fire  insurance  and  other  branches 
the  greater  number  of  contracts  are  reissued  every  year. 

These  vast  accumulations  are  sustained  and  increased 
annually  by  the  voluntary  payment  of  premiums  to 
cover  current  and  future  contingencies,  in  an  aggregate 
sum  next  only  in  amount  to  the  enormous  receipts  of  the 
combined  railway  systems  of  the  United  States.  The 
total  insurance  premiums  of  the  United  States  for  1916 
have  been  estimated  as  follows: 

Life  insurance $99i,ooo,cx>o 

Fire  and  marine  insurance 634,000,000 

Casualty  and  miscellaneous 200,000,000 

Comsapention  funds 150,000,000 

Grand  total $1,975,000,000 

Adding  to  this  annual  income  the  existing  assets  of  all 
forms  of  insurance,  amounting  in  1916  to  $6,491,488,812, 
there  were  thus  in  that  year  actual  resources  of  $8,466,- 
488,812  available  and  devoted  entirely  to  the  protection 
of  the  credit  and  the  homes  of  the  people  of  the  United 
States.  No  such  magnificent  showing  of  voluntary  thrift 
and  provision  against  individual  misfortune  has  ever  been 
made  by  any  other  people. 

This  is  the  American  Institution  of  Insurance  in 
which  the  Insurance  Company  of  North  America  and 
its  army  of  agents  are  alike  proud  to  be  a  part. 
Those  engaged  in  the  business  should  seize  every  oppor- 
tunity to  convey  a  knowledge  of  its  extent  and  importance 
to  the  public.  All  insurance  rests  on  exactly  the  same 
principle  —  the  recognition  of  the  law  of  average 
probabilities  and  its  application  to  protect  the  individual 
against  misfortune — and  has  been  popularly  set  forth  as 
follows: 

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E   P   I   S   O   D    ES        OF        HISTORY 


Insurance  collects  from  the  many  to  pay  the  few  who  are 
unfortunate  enough  to  meet  the  inevitable  disasters  that  become 
average  disasters  by  inexorable  laws.  It  exacts  from  us,  in  the 
form  known  as  "premium,"  a  depositor  advance  payment  which, 
when  gathered  with  the  deposits  of  the  other  ninety-nine  thousand 
nine  hundred  and  ninety-nine,  furnish  an  average  experience. 
Out  of  these  collective  deposits  or  premiums  Insurance  pays  your 
loss  and  mine,  sets  aside  a  fund  called  a  reserve  to  give  us  added 
security  and  meet  the  liabiUty  assumed  under  its  contract  with 
us;  pays  the  agent  who  induced  us  to  protect  our  own  interests; 
gives  us  suggestions  and  instructions  to  prevent  accident  and 
prolong  life;  has  our  risks  inspected,  one  by  one,  and  points  out 
and  has  corrected  defects  that  might  produce  loss;  pays  its 
taxes,  some  just  and  others  unjust;  pays  its  administrative  ex- 
penses; allows  itself  a  dividend  on  its  capitalized  investment,  if 
there  is  anything  left;  and  passes  a  balance  to  (or  in  years  of 
excessive  loss  draws  from)  its  accumulated  funds  that  give  security 
and  stability  to  its  contracts  —  assuring  its  payment  of  losses, 
when  losses  come,  no  matter  how  great  the  calamity. 

The  whole  system  of  Insurance  is  based  upon  the  law  of 
averages.  So  many  buildings  burn  every  year;  so  many  accidents 
take  place;  so  many  people  answer  the  final  call.  While  the 
average  experience  determines  the  average  rate  it  is  still  true  that 
each  individual  participant  in  the  Society  of  the  Insured  can,  in  a 
measure,  raise  or  lower  the  average  and  so  fix  his  own  costs  for 
indemnity.  He  can  be  careful  and  cleanly,  live  a  life  in  sanitary 
surroundings  and  help  to  minimize  losses,  prevent  accidents,  pro- 
long life  and  so  reduce  Insurance  costs.  Insurance  is  naturally 
competitive;  its  costs  to  you  and  to  me  rise  and  fall  in  the  very 
measure  that  the  individual  standard  of  each  participant  measures 
with  the  same  standard  set  by  the  whole. 

It  must  be  remembered  that  Insurance  restores  nothing  that 
is  lost.  In  principle  it  means  only  Indemnity  for  loss.  Loss  is 
utter  destruction  —  waste.  Prevent  loss  and  you  prevent  that 
complete  waste  which  drains  the  resources  of  the  world.  Prevent 
loss  and  you  raise  the  standard  of  humanity;  prevent  loss  and  you 
reduce  your  Insurance  cost. 


THE  FORElGiN  'ii\^Dli  CLUB 


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COLUMBIA  UNIVERSITY   LIBRARIES 

This  book  is  due  on  the  date  indicated  below,  or  at  the 
expiration  of  a  definite  period  after  the  date  of  borrowing,  as 
provided  by  the  library  rules  or  by  special  arrangement  with 
the  Librarian  in  chsurge. 


OATS  BORROWED 


OATS  DUE 


DATE  BORROWED 


DATE  DUE 


—  D986  In? 

!  i 

Insurance  conpany  or  North  Amer. 
. Episodes  of  history.... 


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0044250274 


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BOUND 

AUG  1  9  1954 


END  OF 
TITLE 


